Study Guide for Microeconomics
9th Edition
ISBN: 9780134741123
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Question
Chapter 9, Problem 14E
To determine
Identify the effect of imposing sales tax on consumers.
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Suppose that a City government introduces a $ 0.50 excise (commodity)tax on consumers of bottles of soda to improve the health of its citizens.manipulate the accompanying graph to demonstrate the impact of the tax on the market for soda.
What would be the new equilibrium quantity if instead of taxing consumers,the City of taxed producers?
In the United States, payroll taxes are essentially assessed evenly between workers and firms.
If the supply of labor is less elastic than the demand for labor, are workers or firms more likely to bear the additional burden of an increased payroll tax in the United States?
Could this burden be shifted to the firms by assessing the increase in payroll taxes on just firms rather than having firms and workers continue to be assessed payroll taxes equally?
Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections.
To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
Suppose the government imposes a $20-per-bottle tax on suppliers.
At this tax amount, the equilibrium quantity of gin is____
bottles, and the government collects_____
in tax revenue.
Chapter 9 Solutions
Study Guide for Microeconomics
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