Answered: a. Indicate whether each of the given…

a. Indicate whether each of the given factors is likely to raise the economic burden of the tax for you or for the hotel.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

O the marginal tax rate.
the relative supply and demand elasticities.
the marginal principle.
O the cost-benefit priniciple.

Suppose you are planning a summer vacation and book a hotel room online for $149 a night. However, when you get to the
reservation screen, you are informed that you will be charged an additional $30 a night in various taxes that you have to pay to
the hotel.
a. Indicate whether each of the given factors is likely to raise the economic burden of the tax for you or for the hotel.
Raises economic burden for the hotel
Answer Bank
The hotel has unique architecture and is considered a historical landmark.
There are many other hotels in the area.
Raises economic burden for you
It is the peak of tourist season.
A hurricane recently ravaged the area, resulting in many vacancies at competing hotels.
b. Ultimately, who pays the majority of the economic burden of the tax is dependent upon

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