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uantity is en the governmen imposes an excise tax of $2 per unit on the production of gadgets. Subsequent to the tax and the resulting supply shift, the equilibrium quantity falls to 90. The elasticity of demand coefficient associated with the movement between the two equilibrium points is .5. dollars. 45. The post- tax price is equal to 46. The Incidence Ratio is equal to 47. Who bears the greater economic burden of the tax?

uantity is en the governmen imposes an excise tax of $2 per unit on the production of gadgets. Subsequent to the tax and the resulting supply shift, the equilibrium quantity falls to 90. The elasticity of demand coefficient associated with the movement between the two equilibrium points is .5. dollars. 45. The post- tax price is equal to 46. The Incidence Ratio is equal to 47. Who bears the greater economic burden of the tax?

Microeconomics: Principles & Policy
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter17: Taxation And Resource Allocation
Section: Chapter Questions
Problem 4TY
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For Questions 45-47 Suppose the current equilibrium price of a gadget is $4 and the equilibrium quantity is 100. Then the government imposes an excise tax of $2 per unit on the production of gadgets. Subsequent to the tax and the resulting supply shift, the equilibrium quantity falls to 90. The elasticity of demand coefficient associated with the movement between the two equilibrium points is .5. dollars. 45. The post- tax price is equal to 46. The Incidence Ratio is equal to 47. Who bears the greater economic burden of the tax?
Transcribed Image Text:For Questions 45-47 Suppose the current equilibrium price of a gadget is $4 and the equilibrium quantity is 100. Then the government imposes an excise tax of $2 per unit on the production of gadgets. Subsequent to the tax and the resulting supply shift, the equilibrium quantity falls to 90. The elasticity of demand coefficient associated with the movement between the two equilibrium points is .5. dollars. 45. The post- tax price is equal to 46. The Incidence Ratio is equal to 47. Who bears the greater economic burden of the tax?
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