[Basic static analysis of tax] Draw a simple model of the retail market for petrol in Australia. Petrol is taxed in Australia (and in most other countries). Evaluate the welfare consequences of a tax on petrol. Is this an example of government failure or a consequence of market failure?
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[Basic static analysis of tax] Draw a simple model of the retail market for petrol in Australia. Petrol is taxed in Australia (and in most other countries). Evaluate the welfare consequences of a tax on petrol. Is this an example of government failure or a consequence of market failure?
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- Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Suppose the government imposes a $20-per-bottle tax on suppliers. At this tax amount, the equilibrium quantity of gin is____ bottles, and the government collects_____ in tax revenue.Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for rum, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.Comment on the following statement indicating whether you agree with the statement or disagree with the statement and why. Explain your answer. Graphical analysis may be used to support your answer. the government levies taxes on the production and sale of gasoline as well as other items. Since the tax is placed(levied) on the seller, it stands to reason that sellers bear the burden of this tax.
- If a tax is levied on the seller of a product, what will happen to the demand curve and the supply curve? Question 18Answer a. Demand will not change and supply shifts to the right. b. Demand will not change and supply shifts to the left c. Demand shifts to the left and supply will not change. d. Demand shifts to the right and supply will not change.Consider the economy of Cocoland, where citizens consume only coconuts. Assume that coconuts are priced at $1 each. The government has devised the following tax plans:14) A tax that falls in percentage of income as income increases is a flat tax. progressive tax. regressive tax. tariff. 20) Based on the graph, which of the curves would MOST likely depict a supply curve in the long run? (see attached image) curve b curve d curve a curve c
- Question 17 If a tax (paid by consumers) is levied on a good, this would move its demand curve to the left. cause a movement along the demand curve to a (lower price, higher quantity) point. cause a movement along the demand curve to a (higher price, lower quantity) point. move its demand curve to the right.Question 33 Do buyers or sellers bear more of the burden of this tax? Group of answer choices Buyers bear more of the tax burden. Seller's bear more of the tax burden. Buyers and sellers bear the burden equally.An example of an indirect tax is:(a) income tax.example of an indirect tax is: (b) secondary tax on dividends.(c) company tax.(d) value added tax.Q.1.9 Which one of the following statements is INCORRECT?(a) Provincial government forms part of the public sector.(b) Central government forms part of general government.(c) Provincial government forms part of the general government.(d) Public corporations form part of general government.Q.1.10 Openness of an economy is: (a) the extent to which a country is involved in international trade and finance.(b) the degree to which a country generates its economic growth.(c) the degree to which a country generates its income.(d) the extent to which a country is involved in tourism.
- Due to a sales tax, the sale of gameboys decrease from 80 to 70. This tax is a tax on sellers when they receive the units from suppliers. How would the curve look due to this change?Question 27 The government decides that rich people are the ones that should pay taxes; as a result, it taxes luxuries like caviar and expensive jewellery. This plan: Leads to the consumer and producer sharing the tax equally Leads to the required government results, as rich people bear most of the burden of the tax does not shift the supply curve at all shifts the demand curve to the right backfires as produces bear most of the burden of the tax1. Taxes and Efficiency Suppose the government is thinking about levying a per-unit tax of $30 on firms supplying either sweatpants or glasses. The supply curves for both of the two goods are identical, as given by the following graphs. The demand for sweatpants is given by DSDS (on the first graph), and the demand for glasses is given by DGDG (on the second graph). Suppose the government decides to tax sweatpants. The following graph plots the yearly demand and supply for this good. It also plots another supply curve (S+TaxS+Tax) shifted upward by the proposed tax amount ($30 per pair). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for sweatpants. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. Sweatpants MarketTax RevenueDeadweight Loss050100150200250300350400450500550600605550454035302520151050PRICE (Dollars per pair)QUANTITY…
