10) For optimal tax, which of the following rules are true? A) Broad base rule: Better to tax a wide variety of goods moderately than few goods heavily. B) Ramsey rule (the elasticity rule): Lower taxes on goods with more elastic demand. C) Raising tax will likely affect the size of the tax base. Try to tax on subjects that are not under the control of individuals or inelastic subjects. D) The efficiency impact of a tax or subsidy cannot be considered in isolation. E) We had better strengthen the tax-benefit linkage. F) Tax smoothing over periods.
Q: Show that given a linear demand schedule and constant marginal cost, the excise tax will lead to a…
A: market is in equilibrium where demand and supply are equal . the process of getting equilibrium is…
Q: Assume that the federal government replaces the federal income tax with a national sales tax on all…
A: A federal income tax is the tax system where the incomes of individuals, firms, other companies are…
Q: A tax on demand shifts ________________ , and the burden of the tax falls on _______________.…
A: Taxes are the amount charged by the government inorder to maintain the economic value of the…
Q: The tax-inclusive price of a carton of cigarettes in Canada is $100 per carton. Per capita…
A: Per capita tax revenue is the amount of tax amount collected by government on per person , this is…
Q: Suppose that the demand and supply functions for a good are given as follows: 1728 Demand: Q %3D…
A: Demand: Q = (1728 / P) Supply: Q = P2 At equilibrium, demand = supply => (1728 / P) = P2 =>…
Q: Suppose the demand for football tickets is QD=360-10P and the market supply is QS=20P. a) What…
A: Government imposes a $4 excise tax per ticket on the sellers of tickets, thus sellers receive $4…
Q: Suppose that a per-unit tax of 25 centavos per pack is placed on the sale of cigarettes by the…
A: 1. Burden of tax at D1 (Elastic demand): The price and quantity before tax is $1.30 and 5 units…
Q: You have the following information from the market Demand function: QD=280−5P Supply function:…
A: Since you have asked a question with multiple sub-parts, we will solve the first three sub-parts for…
Q: Its is known that the demand function for a product is P = 24 - 1/2Q and the supply function Q = 4 +…
A: Demand: P = 24 - 1/2Q Q = 4 + 2P P= Q/2-2 Equilibrium: Q=22 units, P= IDR13 The government provides…
Q: Suppose the market demand for milk is Qd = 40 – 4P Where Qd is millions of gallons demanded and P…
A:
Q: The demand and supply in a perfectly competitive market are QD = 60 - p and QS = 2p , respectively.…
A: QD=60-p and QS=2p In market equilibrium QD=QS so p=$20 and quantity =40 units
Q: - The greater the elasticities of demand and supply the:
A: As per fundamental economic hypothesis, the supply of a goods increment when its value rises. Then…
Q: Which of the following statements are correct? The statutory or legal incidence of a tax determines…
A: The tax can be divided into two categories such as per unit tax and lumpsum tax. Any tax results in…
Q: 9. The demand and supply functions for product x are given, respectively, by the equations: P-83.6-…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: By using only one graph, show and explain who bears the burden and excess burden of an excise…
A: As shown in diagram before tax the equilibrium price is determined by the intersection of supply and…
Q: 1. The monthly demand function is p, =31,000,000 --q° and the supply function 3 before taxation is…
A: Inverse Demand: Pd = 31000000 - 1/3q2 Inverse Supply: Ps = 1500000+4500q
Q: If the goverment wants to raise tax revenue and shift most of the tax burden to the consumers, it…
A: Tax incidence measures the burden of tax shares between consumer and seller. It depends on the…
Q: Suppose demand is represented by P = 500.5Q, and supply is represented by P = 4 + 1.5Q. If the…
A: Introduction We have given demand and supply function. We have to calculate total surplus before…
Q: Suppose that the demand and supply functions for a good are given as follows: 1024 Demand: Q°…
A: We are going to find the Elasticity of demand & Supply to answer this question.
Q: 3. Suppose government expenditure is fixed at G and the government uses a lump-sum tax, T, to raise…
A: Lump-sum tax can be understood as the tax system in which the tax amount is fixed and does not…
Q: Find the consumer and producer tax burden. e) Calculate the tax revenue that the government…
A: The tax Shifts the supply curve to the left and decreases supply which decreases the quantity and…
Q: The demand for X is given by X = 100-2P, and its supply is perfectly elastic at P,= 14. The demand…
A: Note:- Since we can only answer up to three subparts, we'll answer first three. Please repost the…
Q: 4. The demand and supply functions for product x are given, respectively, by the equations: P = 83.6…
A: Note:- Since we can only answer up to three subparts, we'll answer the first three. Please repost…
Q: The actual burden of a tax falls most heavily on the side of the market that is more elastic. O…
A: with the imposition of tax, there is increase in price paid by buyerspTwhereas decrease in price…
Q: The incidence of a unit tax depends on the elasticities of supply and demand. With appropriate…
A: The markets for goods, and services operate on the basis of the demand forces, where the demand…
Q: Title The supply and demand equations for a good are respectively. The government decides to impose…
A: Given: The supply and demand for an equation are: Qd = 500 - 9pQs = -100 + 6p Tax = t per unit of…
Q: The market demand for a product is Q = 290 - 7P, and the market supply is Q = -90 + 12P (where Q is…
A: Answer- "Thank you for submitting the question. But ,we are authorized to solve only 3 sun parts…
Q: 4. Given demand function is P = 180 – 8Q and supply function is P = 25 + 2Q. If the government…
A: Demand function:PD=180-8QSupply function:PS=25+2Q
Q: If the burden of a tax on sugary drinks is borne mostly by consumers, it must be the case that: a)…
A: The demand curve of a good shows the quantity demanded of a good at various possible price levels…
Q: Suppose the government imposes a luxury tax on very expensive jewelry. This tax follows the ________…
A: Given : Government Imposes a luxury tax on expensive jewelry.
Q: The short-run market demand and supply curves for good X are as follows: QD = 20 - 4P QS = 7 +…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: The demand for mineral water is P=10 – (2/3) Q and supply function for mineral water isP=1+(1/3)Q…
A: P = 10 – (2/3)Q (Demand Equation) P = 1+(1/3)Q (Supply Equation) To find out the equilibrium…
Q: What is the relation between elasticity and tax incidence? Question 8 options: Only the…
A: * SOLUTION :- (8) From above information the answer is provided as
Q: Suppose that the demand and supply functions for a good are given as follows: Demand: 0-1080-7P…
A: Demand equation: Q = 1080 - 7P => P = (1080 - Q)/7 -----------> eq(1) --------------------…
Q: Assuming that supply is somewhat elastic, the burden of a per unit tax is borne more by consumers…
A: The elasticity of supply and demand determines the amount of the burden of tax bore by a consumer…
Q: When the absolute value of price elasticity of demand is greater than the absolute value of price of…
A: The customers will bear a larger fraction of the tax imposed if the demand (dd) is going to remain…
Q: True, False or depends. Please develop your answer: The sunk efficiency loss generated by a tax is…
A: In economics, sunk efficiency loss by a tax refers to the situation when an individual or firm faces…
Q: The efficiency loss of imposing an excise tax is due to: a. Paying a higher price per unit. b.…
A: The efficiency loss occurs due to the over production or underproduction. On the other hand, an…
Q: Assume we have a unit tax of 10%. If the seller is able to shift the complete burden of the tax to…
A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…
Q: Consider the demand and supply for strawberries to be given by Qd= 10-0.33P and Qs=-6+P and the…
A: ‘Equilibrium’ refers to situation where quantity(Q) demanded equals quantity(Q) supplied. The…
Q: Tax incidence. Given: Demand (D): P = 100 – 1.5 Q Q* = 40 P*=40 Supply (S): P = 20 + 0.5 Q a.…
A: Since you have posted a question with multiple sub-parts, we will solve first three questions for…
Q: If the government imposes a $5 excise tax on the production of wine, then from the perspective of…
A: Consider a liner supply function P=a+bQ .... (1)
Type answer please. I ll rate
Step by step
Solved in 3 steps
- The demand for mineral water is P=10 – (2/3) Q and supply function for mineral water isP=1+(1/3)Q What is the burden of the tax on producers and consumers and explain how the tax burden isrelated to elasticities? thanks in advance!**Elasticity and tax incidence: How does elasticity affect the incidence (burden) of a tax on goods and services? Specifically, model and discuss the following two situations: one where demand is relatively more elastic than supply, and the other where demand is relatively less elastic than supply. In your discussion of these two situations, pay particular attention to: The change in the price paid by consumers, and the price received by producers when a tax is imposed; The revenue raised by the government; The change in surplus, and any associated deadweight losses.Consider a market with the following demand and supply curves: Q (p) = 20 – 2P Q (p) = - 10 + 3P (b)Suppose the government imposed a sales tax of $0.80 per unit of output sold, find the price paid by the consumer, the price received by the supplier, the equilibrium quantity transacted, and the total tax revenue received by the government. (c)What do you think is the purpose for such tax policy? In your explanation, include a brief discussion of the importance of price elasticity of demand in the choice of commodities to be taxed in order to achieve specific policy goal(s).
- What effect does a tax levied on the supplier of a product have? a. It shifts the demand curve upward (or to the right). b. It shifts the supply curve upward (or to the left). It shifts the supply curve downward (or to the right). It shifts the demand curve downward (or to the left). d. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.1. When the absolute value of price elasticity of demand is greater than the absolute value of price of elasticity of supply, we can say with certainty: A. Consumers bear most of the tax burden. B. Producers bear most of the tax burden. C. The burden is equal for consumers and producers. D. Any of the above E. None of the aboveThe market demand for a product is Q = 290 - 7P, and the market supply is Q = -90 + 12P (where Q is quantity and P is price). The elasticity of demand: -.90 The elasticity of supply: 1.20 Suppose the government imposes a $1.20 tax per unit. 1. Use the values for price elasticity of demand and supply to calculate the tax burden on consumers relative to suppliers (or producers). 2. What is the actual tax burden on suppliers? 3. What is the actual tax burden on consumers? 4. Calculate the deadweight loss of the tax, using only the price elasticity of demand and supply, the per-unit tax, and equilibrium price and quantity. Please do fast ASAP fast
- Let the consumer have the utility function a. Show that the utility maximizing demands are and b. Letting p1 = p2 = 1, use the inverse elasticity rule to show that the optimal tax rates are related by c. Setting w = 100, r1 = 0:75, and r2 = 0:5, find the tax rates required to achieve revenue of R = 0:5 and R = 10. d. Calculate the proportional reduction in demand for the two goods comparing the no-tax position with the position after imposition of the optimal taxes for both revenue levels. Comment on the results.Suppose the demand for football tickets is QD=360-10P and the market supply is QS=20P. a) What price would firms receive after the tax is imposed & What share of the tax is borne by the consumers? b) What share of the tax is borne by the sellers? & What can you say about relative elasticities of demand and supply based on your answers in tax is borne by the consumers and tax is borne by the sellers? c) Calculate tax revenue collected by the government from this tax.Suppose the market demand for milk is Qd = 40 – 4P Where Qd is millions of gallons demanded and P is price per gallon. Suppose the market supply for milk is Qs = - 40/3 + 20/3P Calculate tax revenue for tax rates of $3, $4 and $5 per gallon of milky. Tax revenue reaches a maximum at A.a tax rate greater than $5 per gallon of milk. B.$5 per gallon of milk. C.$4 per gallon of milk. D.$3 per gallon of milk.
- Please solve q.1 , q.2 , q.3 All 3 questions please if you can't please skip. Q.1 Assume we have a unit tax of 10%. If the seller is able to shift the complete burden of the tax to the buyer, without decreasing the pre-tax price of the good, demand for the good is likely Select one: a. very inelastic. b. very elastic. c. unit elastic. Q.2 Which two pairs of goods likely have a relatively weak negative cross price elasticity for most people? Select one: a. Peanut butter and computers. b. Sprite and Coca Cola. c. Sausages and ketchup. d. Beef and fish. e. chocolate milk and skim milk. Q.3 If a product has many substitutes, which of the following statements is correct? Select one: a.It is likely that its cross price elasticity is close to -3. b. It is likely that it is a normal good. c. It is likely that its supply elasticity is low. d. It is likely that its price elasticity of demand is very low. e. None of the above.very urgent!!! the demand for mineral water is P=10 – (2/3) Q and supply function for mineral water isP=1+(1/3)Qa) Find the equilibrium price and quantity and Price elasticities of demand and supply.b) Suppose a unit tax (t) is imposed on suppliers (t= 3TL). Find the new equilibrium.c) Find the price that consumers pay and the price that producers get after the tax.d) What is the burden of the tax on producers and consumers and explain how the tax burden isrelated to elasticities? thank you in advance.Tax incidence.Given:Demand (D): P = 100 – 1.5 Q Q* = 40 P*=40Supply (S): P = 20 + 0.5 Qa. Suppose a specific tax of P10 per unit is imposed on producers.i. What is the new supply function?ii. Solve for the new equilibrium quantity and price after the tax is imposed.b. How much will the consumer pay for the good (price)?c. How much will the producer sell for this good (price)?d. What is the amount of total tax revenues?e. Who bears the burden of tax? Why?f. Calculate the elasticity of demand and supply to validate your answer in letter e. Discuss youranswers.