EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
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Chapter 6, Problem 6PA
To determine
The impact of $500 tax on luxury cars.
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The Government places a luxury tax on cars that sell for over $50k. What would happen to the supply of Bentleys?
Under which circumstances does the tax burden fall entirely on consumers?
A local government is seeking to impose a specific tax on hotel rooms. The price elasticity of supply of hotel rooms is 3.5, and the price elasticity of demand is 0.3.
If the new tax is imposed, who will bear the greater burden-hotel suppliers or hotel consumers?
The hotel consumers pay percent and hotel suppliers pay
percent of the tax. (Enter your responses rounded
one decimal place.)
Chapter 6 Solutions
EBK ESSENTIALS OF ECONOMICS
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