The government of your country has recently decided to put a tax on calling cards. This decision by thegovernment will result in an increase in the tax paid by the sellers if:Select one:O a. The supply for phone cards is inelasticO b. The demand for phone cards, is price inelasticO c. The price is higherO d. The tax is placed on the buyere. The tax is placed on the sellerNext page

Equilibrium is achieved at the output level where Qs equals Qd.

Answered: The government of your country has…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 8PA: The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase:...

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The New York Times reported (Feb. 17, 1996) that subway ridership declined after a fare increase: There were nearly four million fewer riders in December 1995, the first full month after the price of a token increased 25 cents to 1.50, than in the previous December, a 4.3 percent decline. a. Use these data to estimate the price elasticity of demand for subway rides. b. According to your estimate, what happens to the Transit Authoritys revenue when the fare rises? c. Why might your estimate of the elasticity be unreliable?
When someones kidneys fail, the person needs to have medical treatment with a dialysis machine (unless or until they receive a kidney transplant) or they will die. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that the supply of such dialysis machines will primarily determine the pure.
Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.
Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
Time left C If the government wishes to discourage smoking by tax increases, the buyer pays a larger share of the tax if the: Select one: O a. tax is imposed on the buyer O b. demand is price inelastic O c. supply is price inelastic O d. tax is imposed on the seller O e. price is higher Next
Which of the following would cause a shift in the demand curve for notebooks. Select one: O a. A fall in the price of notebooks. O b. A rise in the cost of printing. Oc. A fall in the cost of printing. O d. Lecturers putting lecture notes online. O e. A rise in the price of notebooks.
2. Suppose the price.elasticity of demand for commödity M is less than one. When a tax is imposed on commodity Mproduetion, it changes the price, quantity, and consumer speņding in which of the following ways? - Price Quantity Spending Irierease Decrease Decreàse. Therease Ancrease a. Increase- b. -Deerease Decrease Decrease Decrease - Decrease Iacrease
11. Consider public policy aimed at smoking. a. Studies indicate that the price elasticity ofdemand for cigarettes is about 0.4. If a packof cigarettes currently costs $2 and thegovernment wants to reduce smoking by20 percent, by how much should it increasethe price? b. If the government permanently increasesthe price of cigarettes, will the policy have alarger effect on smoking one year from nowor five years from now? c. Studies also find that teenagers have ahigher price elasticity than do adults. Whymight this be true?
1. What is the relationship between total revenue and own-price elasticity of demand? 2. Illustrate a situation when the producer of a good will have a greater tax incidence than a consumer.What does elasticity have to do with tax incidence?
If buyers pay more of a tax than do the sellers اختر أحد الخيارات a. demand is more elastic than supply O .b. supply is more elastic than demand O C. None of the above answers is correct O .d. the equilibrium price paid by buyers rises by less than half the amount of the tax „e. the amount of tax revenue collected by the government is almost zero
Consider public policy aimed at smoking.a. Studies indicate that the price elasticity of demandfor cigarettes is about 0.4. If a pack of cigarettescurrently costs $5 and the government wantsto reduce smoking by 20 percent, by how muchshould it increase the price?b. If the government permanently increases theprice of cigarettes, will the policy have a largereffect on smoking one year from now or five yearsfrom now?c. Studies also find that teenagers have a higherprice elasticity of demand than adults. Why mightthis be true?
what is the elasticity of demand and how do I calculate it/

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