Suppose the government decides to raise the gasoline tax as a way to reduce air pollution and traffic congestion to their optimal levels. Which of the following describes why corrective taxes, such as the gasoline tax, are unlike most other taxes? Other taxes get passed on from businesses to consumers, whereas corrective taxes do not. O Other taxes are typically used to cover general spending, but funds from corrective taxes can be used only to alleviate pollution. O Corrective taxes bring the allocation of resources closer to the social optimum and, thus, improve economic efficiency. O Corrective taxes alter incentives, whereas other taxes typically do not.

Q: 11. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed,…

A: Tax Q TR 0 50 0 20 40 800 40 30 1200 50 25 1250 60 20…

Q: In an election debate, two candidates for governorare debating about whether to raise the…

A: Restatement of the 1st candidate, say Candidate A: If we see Candidate A, he argues that if sales…

Q: If a consumer has a utility function u(x1, x2) = x1x42, what fraction of her income will she spend…

A: Hello. Since you have posted multiple questions and not specified which question needs to be solved,…

Q: 6. One rationale for imposing taxes on alcohol con- sumption is that people who drink alcohol impose…

A: The markets are the place where the buyers, and sellers of various goods, and services meet with…

Q: a. How much tax revenue is collected and what is the excess burden of the $8 tax on M? b. How much…

A: In this question, there are two goods :-good M and good K Both these goods are independent to each…

Q: The idea that taxes should be imposed to raise revenues but not change incentives is called a. the…

A: In a market, government imposes taxes in different ways according to the requirements of the market.

Q: Suppose that the government imposes a tax onheating oil.a. Would the deadweight loss from this tax…

A: When the government impose a tax on the commodity then the price of that commodity rises.

Q: Suppose that the government imposes a tax on heating oil. Would the deadweight loss of this tax…

A: In economics, inefficient allocation of resources tends to create deadweight losses which reduce the…

Q: m price of a goozum is $12, and the equilibrium quantity is 1,000 units. Suppose that every time a…

A: In free market consumer surplus is maximized at point where demand is equal to supply.

Q: suppose the demand and supply equation for eggs in market is: Qd= 100-2p;  Qs= 10+40p Complete…

A: Since you have posted a question with multiple sub-parts, we will solve first three parts for you.…

Q: Refer to Figure 1. 1 the initial effect of an increase in taxes is illustrated as a movement from *…

A: When aggregate demand falls, aggregate demand curve shifts leftwards. When aggregate demand rises,…

Q: QUESTION 3 Figure 1price 10 D 10 20 30 40 50 60 70 80 quantity Refer to Figure. Suppose the…

A: In the production process, the conditions and fluctuations that happen between demand and also the…

Q: If you’ve ever travelled to another country, such asGermany, you may have noticed that the price on…

A: A tax on consumption is placed on a product whenever value is added at each level of the supply…

Q: In Virginia, in 2019, if you made $10,000 a year in income, you paid $120 +5% of excess over $5,000.…

A: There are different types of taxes imposed by the government on the basis of the type of transaction…

Q: Suppose that the government has decided to place a $2 per litre tax on soft drinks. In this market,…

A: The economics as a study is based upon the idea and decision making where the resources are to be…

Q: Which one of the two policies, a tax on pork meat consumption, or a tax on pork meat production, is…

A: A tax in economics is described as a charge or fee that is levied by the government of a nation on…

Q: mpetitive markets ere is often a trade-off between equity and efficiency. mpetitive markets lead to…

A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If you…

Q: 3. Suppose a tax of $0.10 per unit on a good creates a deadweight loss of $100. If the tax is…

A: The creation of cost due to inefficiency of the market when demand and supply tend to be out of…

Q: Suppose the government removes a tax on buyers ofa good and levies a tax of the same size on sellers…

A: Tax is always a subject to the consumer, it means if tax is levied on the consumer then it directly…

Q: In the past, some counties and countries have imposed taxes on sugar, saturated fats, and food made…

A: Tax: It refers to the income of the people which is paid to the government in the form of taxes.…

Q: In a supply and demand model, excise taxes on goods and services cause deadweight loss because: O…

A: A direct tax is one that is paid directly to the institution that imposed it. Individual taxpayers,…

Q: Which of the following statements is true? O A. The equilibrium price after a specific tax will be…

A: Incidence of tax depends on price elasticity of demand and supply.

Q: What is wrong with this answer?

A: The correct answer is No one would have an incentive to work once they had earned $200,000, so…

Q: can you answer this please

A: Tax revenue is positively related with the GDP. When the GDP is increases, then the tax revenue…

Q: Suppose that the government wants to tax wealthy people. They notice that only wealthy people buy…

A: The given tax on Yachts is an example of a luxury tax. A luxury tax is a tax that is imposed on the…

Q: The incidence of a tax is determined by which side of the market is less sensitive to a change in…

A: Tax incidence refers to the split of a tax burden across stakeholders such as buyers and sellers,…

Q: c) Now suppose that instead of using a sales tax the mayor decides to use an income tax of 5% or…

A: (c): The Mayor imposes income tax of 5% i.e. T = $100 per person.  Thus new budget (BC) constraint…

Q: se graph to explain Suppose prices are PA = 2, PB = 1 and income is n = 100. (a) Show with the graph…

A: Given: PA = 2, PB = 1 Income (n) = 100

Q: Which of the following best describes why the government is not able to decide whether it will be…

A: Equilibrium price and quantity are determined where market demand is equal to market supply.…

Q: 1. For what kind of preferences will the consumer be just as well off facing a quantity tax as an…

A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Suppose the government eliminates the income tax and replaces it with a consumption tax. With a…

A: After imposition of consumption tax the demand curve will shift leftward. Because tax will reduce…

Q: Fill in the Demand Schedule below, and draw the Three Separate Private Demand functions. Then draw…

A: a) Following below is the demand schedule and graph for the demand function for John, James and Jane…

Q: If the government imposes a $20 floor price for this good or service, would a surplus or deficit…

A: Price floor is a minimum price at which a seller can sell a commodity. The government uses a price…

Q: 4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed,…

A: In economics, the Laffer curve outlines a hypothetical connection between paces of taxation and the…

Q: According to the New York Times on July 24, 2011, wealthy families are using private planes to send…

A: Equality of well being  The equality of well-being is one of the matters which affects today's…

Q: The graph shows the demand and supply of bungee jumps in Xtremeland. The government decides to…

A: From the demand schedule, the demand equation is P = 200 – 2Q and the supply equation is P = 40 +…

Q: Suppose the government wants to reduce the consumption of cigarettes. To do so, it is analyzing two…

A: The scenario with cigarette taxes indicated that, attributable to inelastic demand, taxes are…

Q: Notice that the before-tax equilibrium price was 25. Compared to the price, in the after-tax…

A: Tax incidence  refers to the loss of welfare caused by the imposition of taxes . So , Consumer…

Q: se a circular flow diagram to show how the allocation of resources and the distribution of income…

A: 1) A 2-percentage point reduction of the corporate income tax: Generate money from collecting income…

Q: The graph shows the market for books when books are not taxed. Price (dollars per book) 12- Now the…

A: Tax is the primary source for the government for meeting different projects.

Q: Consider the following hypothetical income tax brackets for a married couple. Assume for simplicity…

A: Average tax rate is the total amount of tax divided by total income. Marginal tax rate is the rate…

Q: You have been asked to explain to Magdalena Andersson and Per Bolund what the effects will be of…

A: Because of increase in tax on petrol by 2 SEK per litre,price of petrol would increase by 2 SEK per…