If the government wishes to discourage smoking by tax increases, the buyer pays a larger share of the tax ifthe:Select one:O a. tax is imposed on the buyerO b.price is higherO c.supply is price inelasticO d.demand is price inelasticO e. tax is imposed on the seller You and your best friend want to hire a professional photographer to take pictures of your two families. Thecosts of the four potential sellers in the local photography market are: Lebron $700; Kobe $600; Kevin $450 andSteve $400. You and your friend agree to offer $500 for each session. Who accepts the offer, and what is thetotal producer surplus in the market?Select one:O a. Kevin and Steve; $150Ob. LeBron and Kobe: $500Oc. LeBron and Kobe; $300Od. Kevin and Steve: $500Bw

Answered: If the government wishes to discourage…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
price is higher
O c.
supply is price inelastic
O d.
demand is price inelastic
O e. tax is imposed on the seller

You and your best friend want to hire a professional photographer to take pictures of your two families. The
costs of the four potential sellers in the local photography market are: Lebron $700; Kobe $600; Kevin $450 and
Steve $400. You and your friend agree to offer $500 for each session. Who accepts the offer, and what is the
total producer surplus in the market?
Select one:
O a. Kevin and Steve; $150
Ob. LeBron and Kobe: $500
Oc. LeBron and Kobe; $300
Od. Kevin and Steve: $500
B
w

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Elasticity and taxes are two important concepts in understanding the burden and incidence of taxes. The government also uses them to figure out how much tax should be applied to specific items. Higher taxes are frequently levied on inelastic demand goods since the quantity demanded does not change as a result of the taxation, and the government makes a significant profit. Because the quantity demanded fluctuates a lot due to taxing, taxes on commodities with elastic demand are lower.

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