EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Chapter 7, Problem 9SP
(a)
To determine
Describe the impact of tax on the number of leaf blowers sold.
(b)
To determine
Illustrate the social optimal price to the consumer.
(b)
To determine
Illustrate the private market price.
(d)
To determine
Illustrate the net price after taxes.
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During the COVID-19 pandemic, alcohol consumption increased dramatically. In response, the government is considering increasing the tax rate on alcohol. It's known that the demand for alcohol is inelastic, and the supply of alcohol is perfectly elastic. Which of the following statements are true? (Select all that apply.)
Question 5Answer
a.
A tax on alcohol is one way to make consumer internalize the cost of the externalities associated with drinking, such as long-term health implications.
b.
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c.
It doesn't matter how the tax is implemented.
d.
Consumers and suppliers will split the burden of the tax.
e.
The government will collect more revenue if the tax is on the suppliers.
f.
Alcohol consumption will decrease more in the short-run than in the long-run.
g.
Alcohol consumption will decrease more in the long-run than in the short-run.
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The table below shows the demand for pollution permits to emit hydrocarbons in a particular industrial park. Each permit allows the owner to release one tonne of pollutants into the atmosphere.
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a. If no fee for a pollution permit were charged, how many tonnes of pollutants would be discharged into the atmosphere, assuming a straight-line demand curve? Quantity: tonnesb. Suppose government were to set a fee of $3,500 per pollution permit. How many tonnes of pollutants would now be dumped? What is the total revenue received by government? Quantity: tonnes
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What happens in the market for a good that pollutes the air when it is manufactured if government decides to tax its production? Will this reduce the amount of air pollution?
Chapter 7 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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