1. Suppose the demand curve for a good is downward sloping and the supply curve is upward sloping. At the market equilibrium, if demand is more elastic than supply in absolute value, a 1 TL specific tax will increase the price to consumers by 1TL. 2. A tax system in which the ratio of tax payments to income increases as income rises is called as proportional tax. 3. The excess burden of a tax is proportional to the tax rate.

Principles of Macroeconomics (MindTap Course List)
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Chapter6: Supply, Demand, And Government Policies
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Please write down whether the following statements are true or false, and explain your answer very briefly. 

1. Suppose the demand curve for a good is downward sloping and the supply curve is
upward sloping. At the market equilibrium, if demand is more elastic than supply in absolute
value, a 1 TL specific tax will increase the price to consumers by 1TL.
2. A tax system in which the ratio of tax payments to income increases as income rises is
called as proportional tax.
3. The excess burden of a tax is proportional to the tax rate.
Transcribed Image Text:1. Suppose the demand curve for a good is downward sloping and the supply curve is upward sloping. At the market equilibrium, if demand is more elastic than supply in absolute value, a 1 TL specific tax will increase the price to consumers by 1TL. 2. A tax system in which the ratio of tax payments to income increases as income rises is called as proportional tax. 3. The excess burden of a tax is proportional to the tax rate.
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