6.) Government intervention arises from market failure and often includes which of the following? a competition generation b. tax policy c. competition generation and tax policy d. neither competition generation nor tax policy
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6.)
Government intervention arises from market failure and often includes which of the following?
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a competition generation
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b. tax policy
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c. competition generation and tax policy
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d. neither competition generation nor tax policy |
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Solved in 3 steps
- Graph B.5. shows the economics offects of a per-unit tax Refer to Graph B 5. to answer (38 following questions Graph B.5 P S P₁ D₂ D₁ Q Q₁ Q₂ Qs (a) is the tax levied on buyers or on sellers? (b) What is the price buyers pay after the tax is imposed? (c) What is the price the sellers receive after the tax is imposed? (d) What area represents government tax revenue after the tax is imposed? Ps ܘ ܘ ܘ ܘ ܘ P₂ B C F 11 J К H L M2.) Tax incidence is always highest for the side of the market that a.) Has the lowest legal tax obligation b.) Has the highest legal tax obligation c.) Has the highest price elasticity d.) Has the lowest price elasticity 3.) Suppose the government introduces a $2 per ice cream cone tax on producers in the market for ice cream. What will producer tax incidence be? a.) $0 b.) $1 c.) $2 d.) Not enough information 4.) Consumer surplus is equal to minus a.) Cost to produce, price b.) Price, cost to produce c.) Willingness to pay, price d.) Price, willingness to pay 5.) Producer surplus is equal to minus a.) Cost to produce, price b.) Price, cost to produce c.) Willingness to pay, price d.) Price, willingness to pay 6.) When price decreases, consumer surplus increases because: a.) the lower price allows new consumers to enter the market b.) consumers already in the market benefit from buying at a lower price c.) both a.) and b.) d.) neither a.) nor b.)Question 25 The burden of a tax on a good is said to fall completely on the producers if the: a. wages received by workers who produce the good increase by the amount of the tax. b. price paid by consumers for the good increases by the amount of the tax. c. price paid by consumers does not change. d. price paid by consumers for the good declines by the amount of the tax.
- Question 23 Why might a tax be inefficient? a It distorts behavior, causing the marginal costs to be higher than the marginal benefits b The average cost of the tax is too high. c The tax is politically infeasible. d The tax does not collect enough revenue.18. Answer all parts (a)-(c) of this question (a) Explain the concepts of consumers' surplus and producers' surplus. Why in a competitive market social welfare is the highest at the equilibrium? Use a diagram to illustrate your answer. (b) Explain the main effects of the introduction of a specific tax on the competitive market equilibrium. How these effects depend on the elasticity of demand and supply? Use a diagram to your answer. (c) Since specific taxes introduce a possible welfare loss in a free market, would you argue against the use of this government policy? Explain.1.) Relevance of the Taxation in the Philippines (What are the advantages and Disadvantages of Taxation in the PH?) 2.) Why is the Land of the Farmers today in the Philippines, haven't still retracted their Land because of the Government?
- 185.Suppose the government wanted to impose a tax and wanted the entire burden of the tax to fall on the sellers. What would have to be true of a market for this to be possible? (A) The sellers would have to have a perfectly inelastic supply curve, and the buyers would have to have a perfectly inelastic demand curve. (B) The buyers would have to have a perfectly elastic demand curve, and the sellers must not have a perfectly elastic supply curve. (C) The sellers would have to have a perfectly inelastic supply curve, and buyers must not have a perfectly inelastic demand curve. (D) The buyers would have to have a perfectly inelastic demand curve, and the sellers would need not to have perfectly elastic supply curve. (E) Neither buyer nor seller should have perfectly elastic or perfectly inelastic curves.Figure 4-22 Price Market (a) Market (b) Pricel D Quantity Refer to Figure 4-22. In which market would the actual burden of a tax fall most heavily on the seller? Quantity Market (c) In none of the markets, as taxes only burden buyers Price QuantityQuestion 6 When a tax per unit is placed on the buyer of a good: a the equilibrium price falls and the total amount spent by the buyer decreases if demand is elastic. b when prices increase from the tax, the supply increases because of the higher price. c the buyer and seller share the burden of the tax with the seller receiving relatively less and the buyer paying relatively more. d the seller charges all of the tax to the buyer since the tax was not placed on the seller.
- Suppose the government wants to raise additional tax revenues with the least disruption to prevailing demand patterns. For which product should an excise tax (a tax on the seller) be levied? Select one: a.Frosted Flakes b.hot tubs c.Coca Cola d.Liquor6 To discourage the consumption of a product, the government should impose a tax on the consumers instead of the producers. Do you agree? Explain with a suitable market diagram.50 Price (P) S2 (after tax) S; (before tax) Tax i of $35 $30 $25 $20 E 90 100 Quantity (Q) The diagram above shows a market before and after an excise tax has been levied by the government. The diagram indicates the effective price (net of tax) that sellers receive after the tax is: Select one: а. $35 b. $20 c. $25 d. $30
