MINDTAP PAC F/PRINCIPLES OF MACROECONOMI
19th Edition
ISBN: 9781337622066
Author: Mankiw
Publisher: CENGAGE L
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Question
Chapter 6, Problem 7QR
To determine
The reason which determines the elasticity of tax burden on buyers and sellers.
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How does a tax on a good affect the price paid by buyers, price receive by sellers, and the quantity sold?
Can you explain what happens when a tax is imposed on the buyer of a product and also what would happen if a tax is imposed on the seller? 
What determines whether the buyer or seller pays the bulk of the tax?
Chapter 6 Solutions
MINDTAP PAC F/PRINCIPLES OF MACROECONOMI
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- How can the government improve tax collections without imposing much tax to the consumer?arrow_forwardWhat happens to a country's economy if there is a high tax for the company that earns more in that country?arrow_forwardHow does a tax on a good affect the price paid bybuyers, the price received by sellers, and the quantitysold?arrow_forward
- Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 Some economists believe that a sales tax, in general, is undesirable. Explain. Despite this, why do most countries still impose a tax on cigarette? Explain plausible arguments.arrow_forwardWhat happens to the market equilibrium price and output when tax is imposed on the buyers? Is the burden fall only on buyers – Explainarrow_forwardThe tax on cigarettes in New York City is one of the highest in the nation—$5.85 per pack. What are some of the secondary effects of this tax? Check all that apply.arrow_forward
- If the government wants to raise tax revenue, which of the following items are good candidates for an excise tax? Choose one or more: A. toilet paper B. automobile tires C. cigarettes D. sweet potatoesarrow_forwardDo you think profit could be maintained if the tax burden were simply passed on to the consumers in the form of higher selling price? How will this affect sales? Explain.arrow_forwardIf a tax of 75¢ a cup is introduced, what is the price of a cup of coffee and how much coffee is bought? Who pays the tax?arrow_forward
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