Assuming that supply is somewhat elastic, the burden of a per unit tax is borne more by consumers the more elastic is the demand curve. Explain why above statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate.

Assuming that supply is somewhat elastic, the burden of a per unit tax is borne more by consumers the more elastic is the demand curve. Explain why above statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: xplain how changing the price elasticity of demand from elastic to inelastic affects the consumer's…

A: The percentage change in quantity demanded divided by the percentage change in price is the price…

Q: 1, If the wage rate 'w' is $40 and the cost of capital is $40, calculate the average cost of…

A: In economics, average cost or unit cost is equal to total cost (TC) divided by the number of units…

Q: Suppose legislation is passed stating that a per unit tax of $.50 per gallon of gasoline must be…

A: When demand is more elastic than the supply than in this situation suppliers bear the more burden of…

Q: Suppose an ad valorem tax is imposed in which the Consumer Burden of the tax is less than the…

A: The value which is based on the transaction or the property is known as ad voleram tax. The term AD…

Q: Compared to consumers, producers will lose the greater amount of surplus from a tax if supply is…

A: The correct Option is (A) That is the supply is more elastic than the demand

Q: Refer to the graph shown. Assume the market is initially in equilibrium at point j in the graph but…

A: The equilibrium occurs where the demand and supply forces are equal. The tax is imposed by the…

Q: Supply fucntion: QS=200P-700 Demand function: Qd=3000-100p If a goverment want to reduce the…

A: Demand and Supply Demand refers to the quantities of a commodity that the consumers are ready to…

Q: Suppose legislation is passed stating that a per unit tax of $.50 per gallon of gasoline must be…

A: Answer-

Q: Price Supply A P3 B per P, -unit tax D E P2 F H Demand Q2 Quantity

A: Produce Surplus can be defined as the surplus earned by the producers in the market. It is the…

Q: - Now suppose that the Demand curve is actually slightly more inelastic, and the Supply curve is…

A: (Since you have posted multiple sub-parts, we will answer the first three for you. If you want a…

Q: Suppose that the government imposes a tax on eigarettes Use the diagram below to answer the…

A: The diagram in the question above shows that the demand curve (D) without the tax and supply curve…

Q: - The greater the elasticities of demand and supply the:

A: As per fundamental economic hypothesis, the supply of a goods increment when its value rises. Then…

Q: Which of the following statements are correct? The statutory or legal incidence of a tax determines…

A: The tax can be divided into two categories such as per unit tax and lumpsum tax. Any tax results in…

Q: f the government quadruples the amount of tax on gasoline, can you be sure that revenue fromg…

A: Tax: refers to the unilateral payment towards the government made by the public. Deadweight loss:…

Q: how inelastic supply effect on tax

A: Taxes are defined as the amount of compulsory payment made to the government by the citizens of the…

Q: With a tax of Rs4/unit,the price of the good rises from Rs5/unit to Rs9/unit. Which of the following…

A: The market price of a good was Rs5 (before tax) It means the price paid by consumer (before tax) is…

Q: Example 5. Maximizing Tax Revenue. Suppose the demand and supply functions for a product are p =…

A: The government imposes taxes to correct the market failure caused in a free market and thereby…

Q: A. If the price of Pappy Van Winkle Bourbon (trust me, it exists) retails for $150 per bottle and…

A: In economics, the market equilibrium is the state where the quantity demanded by buyers equals the…

Q: How do the relative elasticities of supply and demand determine tax or subsidy incidence?

A: Tax incidence is how the tax burden is divided between purchasers and sellers.The tax incidence…

Q: What are the two responses с Assuming a unitary elastic demand and supply, a tax on the sellers of…

A: Tax is the policy tool of the government where the government issues an order that a certain sum of…

Q: 4. Study Questions and Problems #4 S MOME RIGUERES 225 40 VORRAGA Curve. A Suppose your marginal…

A: The objective of the question is to understand the relationship between marginal utility and total…

Q: QUESTION 10 The burden of a tax per unit of output will fall heavily on consumers when demand is…

A: The elasticity of demand is a measure of how responsive the quantity demanded of a good is to a…

Q: When demand is less elastic than supply, demanders pay a larger share of the tax and sellers pay a…

A: When tax is imposed, an incidence or burden of tax on market participants depends upon their…

Q: Consider the market for junk food. Illustrate and explain the effects on price, quantity and the…

A: The market for junk food is represented in the below steps.

Q: Assume that the elasticity of demand for fanta is -0.8 while the elasticity of supply is 0.4. What…

Q: When supply is perfectly elastic, who bears the burden of tax? Select one: a. producers b.…

A: The burden of the tax falls on that side of the market (consumer or producer) which is relatively…

Q: The Ramesy rule suggest that society should

A: A tax is a compulsory payment which has to be made to the government on purchase of goods and…

Q: Market for TVs are perfectly competitive. Assume TV supply is point elastic and upward sloping…

A: Elasticity is a measure concern in the marketplace because it influence the decision of a consumer,…

Q: 15 10 suppty demand ey with ta How much revenue will the government gain if they put a $6 tax on…

A: Revenue gains generated by the government = Tax ×Quantity Now, the demand curve is in red line and…

Q: Explains it correctly Q)Elasticity of demand and supply is both 1.23. Will the consumers pay more…

A: The concept of elasticity is used in both demand and supply to determine the extend by which…

Q: The demand function for commodity products: Pd = 35-4Q and the supply function is Ps =5+Q. By the…

A: The equilibrium is established where the demand and supply are equal. The imposition of tax reduces…

Q: The reason which determines the elasticity of tax burden on buyers and sellers.

A: Elasticity determines who will bear the burden of taxes: buyers or sellers. When Demand is more…

Q: PRICE (Dollars per pack) 10 40 AU NE 0 Supply Demand 0 10 20 30 40 50 60 70 80 90 100 QUANTITY…

A: Tax revenue is the product of tax per unit and quantity. The tax revenue lead to the deadweight…

Q: Suppose the supply is perfectly inelastic, which means the price elasticity of supply is 0. A…

A: As supply is perfectly inelastic , the supply curve is vertical in nature. The imposition of tax…

Q: If the demand is more elastic, the burden of the tax falls on: Select one: a. Consumers b. Producers…

A: When demand is elastic increase in price leads to decrease in demand more that affects producer more…

Q: Given the demand and supply equations below, show the burden of a 50% tax on the producers. What is…

A: Answer -

Q: If buyers pay more of a tax than do the sellers اختر أحد الخيارات a. demand is more elastic than…

A: Tax is a compulsory payment that is imposed by the government either directly or indirectly on the…

Q: If the goal is to have the smallest deadweight loss, then a $1 tax should be imposed upon: a a…

A: Elasticity measures the responsiveness of quantity demanded with respect to change in price.…

Q: 6. The government decides to place a $6 unit tax on a product. The following elasticities are known:…

A: Effect of tax vary on consumer and seller , so here we calculate the price paid by the demanders…

Q: Government levied a tax on good A. The less elastic the demand is, the greater or the smaller the…

A: The demand for the good is said to be elastic if the quantity demanded of the commodity changes more…

Q: upply or Demand

A: The elasticity of demand measures how a good deal the quantity demanded of an awesome or service…

Question

Assuming that supply is somewhat elastic, the burden of a per unit tax is borne more by consumers the
more elastic is the demand curve.
Explain why above statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate.

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Similar questions

Explain and demonstrate using appropriate examples, how elasticity when it is zero is applied at the level of the government with respect to the setting of prices for various types of goods and services. (Macroeconomics)
Would consumer or producer carry the burden of tax if good is elastic? Show on a graph
if the demand curve is very inelastic and the supply curve is very elastic in the market then sellers will bear a greater burdeb of tax inposed on the market even if the tax imposed on buyers.True or false
Consider the market for BP gasoline. If the market has a very elastic supply and a very inelastic demand, how would the burden of a tax on BP gasoline be shared between producers and consumers? Draw a graph to support your answer.
Doyle and Samphantharak (2008) find that when a 5% gas tax is implemented, prices consumers pay for gas increase by about 4%. What role does demand elasticity play in determining the size of this price change? That is, under what demand elasticity cases would the price change be closer to 5%, or closer to 0%? Illustrate and explain using supply-and-demand graph(s)..
The side of the market with the relatively higher elasticity will face more of the tax burden. Select one: a. True b. False
Suppose the government applies a specific tax to a good where the demand elasticity, E, is -1.4, and the supply elasticity, n, is 1.2. This good would not be an ideal good for the government to tax since demand is: A. inelastic and would raise much revenue B. elastic and would raise much revenue C. inelastic and would not raise much revenue D. elastic and would not raise much revenue what is the tax incidence on consumers? $?
Q19
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
When demand is more elastic than supply, demanders pay a smaller share of the tax and sellers pay a larger share of the tax. Select one: a. False b. True
(a) Show the market for housing in equilibrium on a diagram, where demand is less elastic than supply, andlabel the respective consumer and producer surpluses. Discuss whether this market is Pareto efficient. (b) Assume that the State Government imposes a per-unit tax on the sellers of houses. A new diagram,shows the imposition of this tax on the market for housing. Does the imposition of this tax cause a Paretoimprovement to the market, explain? (c) Is the tax imposed in part (b) effective for the collection of Government revenue? Justify your answer withreference to your diagram in part (b).
What is the price elasticity of demand(Using the Midpoint method) when the price changes from $10 to $13? If the Government imposes a tax of $6 per burrito, how many burritos will be sold in the market?