1. Suppose the demand curve for a good is downward sloping and the supply curve is upward sloping. At the market equilibrium, if demand is more elastic than supply in absolute value, a 1 TL specific tax will increase the price to consumers by 1TL. 2. A tax system in which the ratio of tax payments to income increases as income rises is called as proportional tax. 3. The excess burden of a tax is proportional to the tax rate.

1. Suppose the demand curve for a good is downward sloping and the supply curve is upward sloping. At the market equilibrium, if demand is more elastic than supply in absolute value, a 1 TL specific tax will increase the price to consumers by 1TL. 2. A tax system in which the ratio of tax payments to income increases as income rises is called as proportional tax. 3. The excess burden of a tax is proportional to the tax rate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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