Essentials Of Economics, Loose-leaf Version
8th Edition
ISBN: 9781337096898
Author: N. Gregory Mankiw
Publisher: South-Western College Pub
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Chapter 6, Problem 6CQQ
To determine
When the impact of tax is mainly on consumers.
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When a good is taxed, the burden of the tax fallsmainly on consumers ifa. the tax is levied on consumers.b. the tax is levied on producers.c. supply is inelastic and demand is elastic.d. supply is elastic and demand is inelastic
A sales tax will be divided so that buyers pay the full amount if
Select one:
a. supply is perfectly inelastic.
b. supply has unitary elasticity.
c. demand is perfectly inelastic.
d. demand has unitary elasticity.
A sales tax is imposed on good A. The supply of good A is not perfectly elastic or perfectly inelastic. Suppose that the demand for good A becomes more inelastic.
(a) Will the tax burden on sellers increase or decrease?
(b) Will the DWL increase or decrease?
Chapter 6 Solutions
Essentials Of Economics, Loose-leaf Version
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- I want the answerarrow_forwardSuppose that in Australia the price elasticity of steel demand of -1.5 and the price elasticity of steel supply is 1.2. If a tax of $50 per tonne of steel is applied, then: a. The tax burden on consumers will be greater than the tax burden on suppliers. b. The tax burden on suppliers will be greater than the tax burden on consumers. c. The tax burden on consumers will be equal to the tax burden on suppliers. d. The steel price is unlikely to be substantially affected.arrow_forwardSuppose that the Australian government imposes a sales tax on a product and both buyers and sellers share the burden of the If the price elasticity of demand for the product is perfectly inelastic. Which of the following is true? Select one: a. Sellers would pay more of the tax than buyers. b. Buyers would pay all of the tax. c. Buyers and sellers would share the tax burden equally. d. Sellers would pay all the tax.arrow_forward
- 1. An example of a market where supply and demand are both inelastic. 2. An example of a market where both supply and demand are both elastic. 3. An example of a market where supply is inelastic and demand is elastic. 4. An example of a market where supply is elastic and deman is inelastic.arrow_forwardQuestion You are in the business of producing and selling popcorn, cheese, crackers, and wine. The government plans to impose a tax on one of these products. Based on the elasticities in the table provided, as a profit-minded business person, which good would you (the business owner) most prefer to have taxed? Price elasticity Price elasticity of supply of demand Popcorn 1.2 2.0 Cheese 2.2 1.1 Crackers 1.6 1.3 Wine 1.7 1.8 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Cheese b. Crackers Рорсоrn Winearrow_forwardIf buyers pay more of a tax than do the sellers اختر أحد الخيارات a. demand is more elastic than supply O .b. supply is more elastic than demand O C. None of the above answers is correct O .d. the equilibrium price paid by buyers rises by less than half the amount of the tax „e. the amount of tax revenue collected by the government is almost zeroarrow_forward
- Which of the following statements about the relationship between elasticity and tax incidence are true ? Choose one or more:A. A tax on a good for which both demand and supply are relatively inelastic will cause a relatively large transfer of welfare from consumers and producers to the government. B.The incidence of a tax depends on who the tax is placed on. C.If a tax is imposed on a good with a perfectly inelastic demand, then consumers bear the full incidence of the tax. D.When demand is more inelastic than supply, producers bear more of the incidence of a tax. E.When demand is more inelastic than supply, consumers bear more of the incidence of a tax.arrow_forwardQ28 NOT GRADED THIS IS A PRACTICE REVIEWarrow_forward1.The supply of meat is more elastic in the long run than in the short run. Ceteris paribus, as time goes by, the burden of a tax on cattle will be increasingly passed on to the: Group of answer choices Grocer Government Rancher Consumerarrow_forward
- 7.04 Review Suppose a tax of $20 is placed on televisions. If this market's supply and demand curves' are elastic, the burden of this tax falls on: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the sellers b the buyers both the sellers and the buyers.arrow_forwardOnly typed answerarrow_forwardWhen supply is perfectly elastic, who bears the burden of tax? Select one: a. producers b. consumers c. producers and consumers d. sellersarrow_forward
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