Producer Farmer Miller Baker Price Paid For Intermediate Goods $0 $0.60 O $0.60, 50.06; $0.66 50.80, 50.08, 50.88 O $1.40, 50.14, $1.54 O $0.60, 50.60, $1.20 $1.40 Price Sells For $0.60 $1.40 $2.50 Assume that the farmer grows wheat and sells it to the miller, the miller turns the wheat into flour and sells it to the baker, and the baker turns the flour into bread and sells it to the final consumer. Refer to Exhibit 11-5 which summarizes the situation prior to the value added tax (VAT). The value added by the farmer is If the government imposes a VAT rate of 10 percent, the farmer must pay in VAT tax and will need to raise the price he charges the miller to

Producer Farmer Miller Baker Price Paid For Intermediate Goods $0 $0.60 O $0.60, 50.06; $0.66 50.80, 50.08, 50.88 O $1.40, 50.14, $1.54 O $0.60, 50.60, $1.20 $1.40 Price Sells For $0.60 $1.40 $2.50 Assume that the farmer grows wheat and sells it to the miller, the miller turns the wheat into flour and sells it to the baker, and the baker turns the flour into bread and sells it to the final consumer. Refer to Exhibit 11-5 which summarizes the situation prior to the value added tax (VAT). The value added by the farmer is If the government imposes a VAT rate of 10 percent, the farmer must pay in VAT tax and will need to raise the price he charges the miller to

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 31CTQ: Consider two ways of protecting elephants from poachers in African countries. In one approach, the...

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the Canadian-goverment is trying to decide between three(3) policies that affects the market of cigars.Policy One: a price support program for the Industry tobacco farmers Policy two: Label requirements and ADs marketing danger awareness warnings to the public.Policy three: a cap on no. of cases of cigars sold per-quarter at twentyfive thousand (25000)casesThe aim of the canadian government is to support farmers while reducing the consumpition of cigars.What combinations of policies should be enacted ? Indentify the right combination:(a) Policy one (b)Policy two (c)Policy three(d) Policy One and Two(e) Policy Two and Three(d) All Three PoliciesSelect Justification for the above selection(a) Reduce quanity of cigars consumed and increases price for tobacco(b)Reduce quanity of cigars consumed and increases price for cigars(C) Reduce quanity of cigars consumed and reduce price for tobacco(D)Reduce quanity of cigars consumed and reduce price for cigars
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