MICROECONOMICS (LL)(FD)
21st Edition
ISBN: 9781260191806
Author: McConnell
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
expand_more
expand_more
format_list_bulleted
Question
Chapter 18, Problem 3DQ
To determine
Relation between Henry George’s proposal for a single tax on land and supply elasticity of land.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
c) Instead of introducing the 20% corporate tax in part (b), the government decided to add an ad valorem input tax of 100% to input 2. What is the profit-maximizing amount of each input to use? What is the profit-maximizing output? How much is Rodrigo’s new profit?
Refer question 1 and answer both the questios
Question 1
Afrm raises capital to invest in a business project. The marginal revenue fromthe first 5 units of capital is: 1st unit has MR $1.64, 2nd unit has MR 1.41, 3rdunit has MR 1.30, 4th unit has MR 1.23, and 5th unit has MR 1.18. If the interestrate is 26%, what is the optimal amount of capital for this firm to borrow?O. 2O. 3O. 4O .5
Question 2
Consider the MR figures in Problem 1. If this firm borrows exactly 5 units ofcapital, what is the firm's total revenue?O. 6.05O. 6.76O. 6.89O. 7.14
Suppose demand and supply are given by: (LO3, LO4)Qx d = 14 − 1/2Px and Qx s = 1/4Px − 1c. How much tax revenue does the government earn with the $12 tax when the new equilibrium quantity is 2 units after tax .
Knowledge Booster
Similar questions
- (Last Word) The combined cost of Social Security and Medicare programs was what percent of U.S. GDP in 2008 (A) 7.6 (B) 12.4 (C) 17.2 (D) 2.9arrow_forward. Wood, the receiver of Stanton Oil Company, suedStanton’s shareholders to recover dividends paid to themfor three years, claiming that at the time these dividendswere declared, Stanton was in fact insolvent. Wood didnot allege that the present creditors were also creditorswhen the dividends were paid. Were the dividendswrongfully paid? Explainarrow_forward1. if alpha - 3 / 4 and H - 1000 and L - 200 what is the minimum rent the landlord charges such that the absolute difference between the rent and the share cropping contract for the tenant in the good state ) is twice as large as the difference between the sharecropping and the rent contract in the bad state ) O. 500 O. 350 O. 233.33 O. 300 2. If UIA - A - 1 / 2 , X - 144 , Y - 64.p - 1 / 2 and CE - 1.5 . Calculate the maximum value of a for the imperfect insurance to be incentive compatible and the intercept of the ICC respectively , O. < 0.125, >4. O.arrow_forward
- Explain three reasons why tax expenditures are politically favorable over cash government spending ? l=Pls answer in 5-6 sentence onlyarrow_forwardProblem 4-16Qualified Business Income (QBI) Deduction (LO 4.10) Rob Wriggle operates a small plumbing supplies business as a sole proprietor. In 2019, the plumbing business has gross business income of $421,000 and business expenses of $267,000, including wages paid of $58,000. The business sold some land that had been held for investment generating a long-term capital gain of $15,000. The business has $300,000 of qualified business property in 2019. Rob's wife, Marie, has wage income of $250,000. They jointly sold stocks in 2019 and generated a long-term capital gain of $13,000. Rob and Marie have no dependents and in 2019, they take the standard deduction of $24,400. The income threshold for QBI limitations starts at $321,400 for married filing jointly taxpayers. a. What is Rob and Marie's taxable income before the QBI deduction? b. What is Rob and Marie's QBI? c. What is Rob and Marie's QBI deduction? Complete Form 8995-A to report Rob’s QBI deduction.arrow_forwardExplain why economic rent is a surplus payment when viewed by the economy as a whole but a cost of production from the standpoint of individual fifirms and industries. Explain: “Land rent performs no ‘incentive function’ for the overall economy.”arrow_forward
- 4. Suppose that there are two households in the economy, A and B, that they face the same wage rate w, and that the government initially uses a proportional income tax according to which each household must pay a fraction t of its labor income as income tax. Assume that given this tax scheme household A chooses to work full time while household B chooses to work part time. Now suppose that the government is interesting in studying the impact of changing the tax system to a progressive tax system where the household work- ing full time would pay a tax rate th >t while the household working part time would pay a rate ti < t. (a) Draw a graph of the impact of this change on the budget constraint that households face with the two different tax systems. (b) What would such a change in the tax system imply for the optimal choice of the two households?arrow_forwardConsider the following supply and demand function, QD = 65 − 2P and QS = 1.5P − 5, and assume a $17.50 excise tax is collected from consumers. (a) Calculate price and quantity in this market before (P1 and Q1) and after the tax (P2 and Q2). (b) What is the amount of tax revenue that is collected from con- sumers, producers and in total? (c) What is the relative tax burden of consumers and producers? (d) Show how the elasticity of supply and demand determine the shar- ing of the tax burden. (e) What is the relative tax burden of producers and consumers if the tax is collected from producers, instead?arrow_forwardWhich of the following statements is correct? O a.Total surplus before the tax ia imposed is $180. O b. After the tax is imposed, consumer surplus is 25 porcent of its pre-tax value O c. After the tax is imposed, producer surplut is 36 percent of its pro-tax value. 0 d. All of the above are coroctarrow_forward
- If the tax code exempts the first $20,000 of income from taxation and then taxes 25 percent of all income above that level, then a person who earns percent and a marginal tax rate of $50,000 has an average tax rate of percent. O 15, 25 O 25, 15 O 25, 30 O 30, 25arrow_forward1 Given the following bids to buy and to sell a used book. Bids to buy: $16. $16 . $18 . $18 . $18 . $20 . $22 $22 . $23 . $24 Bids to sell $18 . $18 . $18 . $22 . $23 . $23 . $23 . $23 . $24 $24 Which argument makes the most sense and why? A) set price equal to $22 to maximize sales B) set price at $16, so that more people will buy the product C) set price at $24 so that more people will sell the product D) set price at $18 because three people will buy and 3 people will sell And describe a real life example for what happens to quantity demanded of your product if A) the price of a complement rises B) the price of a substitute risesarrow_forwardExplain, based on your understanding of the Statutes, Bulletin (above) and CD-405 Instructions, has the taxpayer correctly reported their total franchise tax due for north carolina, given the following example: CD-405 Holding Company Line 1 Net Worth $175,000,000 Line 2 Investment in NC Tangible Property $150,000,000 Line 3 Appraised Value of NC Property $90,000,000 Line 4 Taxable Amount $175,000,000 Line 5 Total Franchise Tax Due $205,000arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning