EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 8, Problem 7MCQ
To determine
To choose:
The option that correctly explains about the social security tax.
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Students have asked these similar questions
The government imposes a per-unit tax of 4 sheqles on banana and demand for banana is elastic. Calculate the consumer and producer share of tax burden and explain it on the graph?
Assume that the demand for coal is more elastic than the supply. A tax on coal will
a.
increase the price of coal paid by buyers, and sellers bear a smaller burden of the tax
b.
decrease the price of coal that sellers really get, and sellers have to bear a bigger burden of the tax
c.
decrease the price of coal paid by buyers, and buyers have to bear a bigger burden of the tax
d.
increase the price of coal that sellers really get, and buyers bear a smaller burden of the tax
Price
(dollars
per case)
$33.25
27
22
20
Tax
50
90
Supply
with tax
Supply
Demand
Quantity
(thousands of cases)
The figure shows the market for beer. The government plans to impose a per-unit
tax in this market. How much is the excess burden?
Chapter 8 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 8 - Prob. 1SPPACh. 8 - Prob. 2SPPACh. 8 - Prob. 3SPPACh. 8 - Prob. 4SPPACh. 8 - Prob. 5SPPACh. 8 - Prob. 6SPPACh. 8 - Prob. 7SPPACh. 8 - Prob. 8SPPACh. 8 - Prob. 9SPPACh. 8 - Prob. 10SPPA
Ch. 8 - Prob. 1IAPACh. 8 - Prob. 2IAPACh. 8 - Prob. 3IAPACh. 8 - Prob. 4IAPACh. 8 - Prob. 5IAPACh. 8 - Prob. 6IAPACh. 8 - Prob. 7IAPACh. 8 - Prob. 8IAPACh. 8 - Prob. 9IAPACh. 8 - Prob. 10IAPACh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQ
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Similar questions
- With a tax of Rs4/unit,the price of the good rises from Rs5/unit to Rs9/unit. Which of the following statements is true a. Price elasticity of demand is equal to price elasticity of supply b. Demand for the product is perfectly elastic c. Price elasticity of demand is equal to infinity d. Demand for the product is perfectly inelasticarrow_forwardPrice (dollars per pizza) 18 8 6 A 2 S+ tax on sellers S D 0 10 20 30 40 50 60 70 80 90 100 Quantity (thousands of pizzas) The figure above shows the pizza market in the city of Pepperoniville. If the government imposes the sales tax shown in the figure on sellers, then the price the buyer pays for pizza is $ and the price the seller receives for the pizza is $ Just enter value. Do not include the "$" sign.arrow_forwardIf sellers bear more of the burden of taxation then O supply is more elastic than demand elasticity of demand and supply are the same demand is more elastic than supply none of abovearrow_forward
- When the price elasticity of supply is relative to the price elasticity of demand, then sellers bear. of the economic burden of a tax. small; none small; all O large; a smaller share O large; a bigger sharearrow_forwardThe reason which determines the elasticity of tax burden on buyers and sellers.arrow_forwardExercise 4 The government has imposed a new tax on all airline travel. The market has two types of travelers: business and leisure. Business travelers have a price elasticity of demand of -1.2, leisure travelers have a price elasticity of demand equal to -3.0. Airlines can price discriminate between these two groups (i.e. charge different prices to each type). Which type of traveler will bear the larger burden of the tax. Explain.arrow_forward
- 1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per pinckney) 21.00- 18.00 Demand 15.00 A B D F —— I I Supply I I 12 16 QUANTITY (Pinckneys) ?arrow_forwardA government intervenes in a market and as a result the demand curve shifts to the right. Which government measure could cause this effect? Pick a,b,c, or d a. A subsidy granted to producers of the product b. A subsidy granted to consumers of the product c. The imposition of an indirect tax d. The imposition of a direct taxarrow_forwardSuppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.6 and 0.8 respectively. a. Suppose the government imposes a per-unit tax on the cigarette sellers. Who, buyers or sellers, would share a heavier tax burden? Explain your answers without calculation. b. Suppose the government imposes a per-unit tax of $40 on the cigarette sellers. By how much would buyers and sellers of cigarettes share the tax burden respectively? Show your calculation. c. Suppose many small sellers, such as newsstands, complain the heavy tax burden borne by them. Would it be better to these small sellers if the government decides to impose a $20 per-unit tax on both the buyers and the sellers of cigarette? Explain.arrow_forward
- Can you explain why I got this wrong? I thought that if the supply was more inelastic then the employers would bear more of the tax? Im confused.arrow_forwardEXERCISE The following table shows the amount of tax paid in three countries X, Y and Z. Identify the type of tax structure practiced in each country. Country New tax paid X Y Z Original income level 1,000 1,200 1,500 Original Tax paid 50 72 150 New income level 5,000 8,000 10,000 500 480 600arrow_forward1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. Demand Supply 28.00 - 20.00 - --- D E 12.00 - QUANTITY (Pinckneys) PRICE (Dollars per pinckney)arrow_forward
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