a) Consider the market for cars, which is currently in equilibrium. The US government imposes an equal tax on production and on consumption. This will O Decrease equilibrium quantity and price O Increase equilibrium quantity and price O Increase equilibrium quantity and decrease equilibrium price O Decrease the equilibrium quantity the market and increase the equilibrium price
a)
Consider the market for cars, which is currently in equilibrium. The US government imposes an equal tax on production and on consumption. This will
O Decrease
O Increase equilibrium quantity and price
O Increase equilibrium quantity and decrease
O Decrease the equilibrium quantity the market and increase the equilibrium price
b)
The government is imposing an effective
O Producers will benefit with certainty
O Consumers will benefit with certainty
O Society will be worse off
O Consumers will be harmed with certainty
c)
Research shows that the income effect for a subgroup of people in the US is stronger than the substitution effect, when it comes to retirement savings. To encourage increased retirement savings rates for this subgroup of the population, the US government should therefore
O Provide tax reductions on retirement savings
O Increase taxes on retirement savings
O Leave things as they are
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