If the government wants to use a Pigouvian tax to alleviate the problem of obesity contagion, what should it tax? What factors go into deciding the size of the tax?

Q: Give an example of a product that has inelastic demand and elastic supply in the market to price. If…

A: An inelastic demand is defined as one where a change in price does not significantly impact demand…

Q: Assuming the demand and supply curve are elastic, discuss the incidence of a tax imposed on the…

A: The demand curve of a good shows the quantity of the good demanded in the market by the consumers of…

Q: Q2. Suppose the government wants to reduce the consumption of alcohol in the market by introducing a…

A: Given; There are two scenarios of alcohol consumers in the market:- i) A demand curve for additive…

Q: With the help of appropriate diagrams, explain how a tax can be used to reduce the consumption of a…

A: Tax are contribution to goverment which are levied on individual as well as or a firm which are…

Q: Some research by the local university shows that eating burritos improves health in several ways.…

A: (Q) Some research by the local university shows that eating burritos improves health in several…

Q: Clarify with the help of elasticity analysis how the tax incidence theory helps to trace the final…

A: The economics as a study is based upon the basic idea that the resources which are present with the…

Q: Generally speaking, how do taxes affect markets? What affect does legal incidence have on…

A: Taxes is the mostly government  as their major source of income.Simply put, they are a tax or fee…

Q: At the current market equilibrium, the price elasticity of supply for a certain good is much lower…

A: Given: Price elasticity of supply is lower than price elasticity of demand . Government imposes a…

Q: Suppose the demand curve for gasoline is more elastic than the supply curve for gasoline.  If the…

A: The tax incidence analysis consists of deciding who is the economic entity that bears the expense of…

Q: What strategies distinguish the different types of foodretailers?

A: Retailers refer to the individuals, or business units that sells goods to the public in small…

Q: The graph shows the market for a vital-to-life drug on which the government has imposed a tax of $2…

A: Elasticity measures the responsiveness of quantity demanded with respect to change in price.

Q: According to studies undertaken by the U.S. Department of Agriculture, the price elasticity of…

A: Price Elasticity refers to the degrees of responsiveness of change in quantity demand with respect…

Q: onomists in Champaign have been studying the local market for pizza. The market is described in the…

A: when the government subsidies the consumption by 2 $ subsidy, the consumption of pizza rises and the…

Q: If we want to increase the cigarette tax to promote environmentally-friendly behavior, the tax will…

A: If we simply consider smoking, it is hard as the demand for cigarette is always inelastic.

Q: Suppose the supply curve for cars is more elastic than the demand curve for cars.  If the government…

A: Tax incidence can be shifted only through sale and purchase transaction.  Share of tax borne by the…

Q: Suppose the California legislature passed a sweeping law to lower the number of regulations for…

A:

Q: why do comsumers pay the tax on goods if the elasticity of demand is less than the elasticty of…

A: Demand is said to be inelastic when the change in price leads a change in quantity demanded in…

Q: What is the tax incidence of an excise tax when demand is highly inelastic and highly elastic?

A: When appropriate the government can intervene in a market by levying excise tax in order to…

Q: the supply of a good is perfectly inelastic, then suppliers will bear the full burden of an excise…

A: Market refers to the place where the consumer can buy whatever they want to buy at the given prices…

Q: Suppose government impose a tax of 1 dollar per bottle on sellers of industrial detergent. Explain 3…

A: The tax is a compulsory payment or a levy which is imposed by the government on providing various…

Q: What would happen if, in order to provide lower cost healthcare, the government decided to set a…

A: A price ceiling (Pmax) refers to a legal maximum on a price at which goods can be sold. For example,…

Q: Minnesota and Tennessee, among other states, have recently begun to tax the sales of healthcare…

A: Burden of the tax does not depend on who it is being imposed on it rather depends on the elasticity.…

Q: Suppose that the supply of oil is elastic and demand for oil is inelastic. If the government taxes…

A: Buyers will bear most of the burden of tax.

Q: Suppose the market for cigarette is competitive. An economist estimates the price elasticity of…

A: Tax burden of buyers = Es / (Es - Ed), where Ed: Elasticity of demand Es: Elasticity of supply

Q: Why is tax necessary for the government? Substantiate your answer in 2 paragraphs

A: A country is controlled by it's government

Q: aph shows the market for a vital-to-life drug on which the government has imposed a tax of $2 per…

A: Elasticity helps to determine how much tax is paid by buyers or suppliers. It shows the…

Q: Suppose that in the market for ice cream, with a $5 per ice cream cone tax, the producer effective…

A: When the tax is imposed on the good, the quantity exchanged in the market decreases.

Q: The US Dept of Agriculture estimates that the elasticity of demand for cigarettes is 0.3 for adult…

A: Price elasticity of demand is the degree of responsiveness of demand for a commodity to a change in…

Q: The demand for the product S is Q = 500 – 8P and its supply is Q = 200 + 4P. The good is currently…

A: Demand function = 500-8PSupply function   = 200 + 4P Excess burden is the deadweight loss caused by…

Q: How does the price elasticity of demand for gasoline impact the effectiveness of taxes on gasoline…

A: Elasticity of demand is the proportional change in demand due to one unit change in price.…

Q: When the price of demand is high and the price elasticity is low the burden of a tax falls primarily…

A: Elasticity of demand depicts how much consumer responds with the change in price.

Q: Indicate whether the statement is true or false, and justify your answer.Pigouvian taxes always…

A: True.

Q: Complete the following table with the tax revenue collected and deadweight loss caused by each of…

A: Given the two graphs, each one of them is shaded with the tax revenue in green and deadweight loss…

Q: if the demand curve is very inelastic and the supply curve is very elastic in the market then…

A: Elasticity is a monetary idea used to gauge the adjustment of the total amount requested of a…

Q: Suppose there is a consumption externality for drug use. Do a standard welfare analysis and propose…

A: Consumption externality for drug use is a negative externality where there exists external…

Q: How a Pigovian tax affects consumers? Please support your explanation based on a figure.

A: The Pigovian tax's aim is to reallocate the expense of the negative externality straight to the…

Q: When the price elasticity of demand is high and the price elasticity of supply is low, the burden of…

A: The tax burden on buyers and sellers: P'b(t) = η/(η+ε) P's(t) = ε/(η+ε),  where, P'b(t) is the…

Q: Suppose a university has 5,000 parking spaces. Show by a supply and demand diagram which side of the…

A: The supply curve determines the quantity that the suppliers are willing to supply at a given price.…

Q: If tax incidence is not affected by whether the government makes buyers or sellers pay the tax then…

A: In a market, governement imposes tax on the exchange of goods and services between seller and buyer…

Q: Complete the following table with the tax revenue collected and deadweight loss caused by each of…

A: Tax revenue is the revenue received by the government due to the tax imposed. Deadweight loss is due…

Q: When considering the possibility of legalizing the recreational use of cannabis, had the state…

A: Assuming when there is a decrease in the price of Cannabis by 70 percentage in between 2014 to 2018…

Q: How would I solve this question?: suppose demand for cigarettes is inelastic and supply of…

A: Elasticity refers to an economic instrument that calculates the change in the quantity demanded a…

Q: For what kind of preferences will the consumer be just as well-off facing a quantity tax as an…

A: Consumer well-off facing a quantity tax in the case of the kinked demand curve for the complement…