Imagine that you work for the central bureaucracy and you need to raise revenue.  You want to use a per-unit tax on some good.  There are two possible goods.  The current equilibrium price and quantity are the same for both goods.  However, for good A, both the supply and demand are more elastic than for good B.  The tax will be $1/unit regardless of which good you choose to tax.  Which good will give you more revenue?  Which one will be more efficient?  Show this with two graphs.

Q: Consider a market with a demand curve of P=10-Q and a supply curve of P=Q. Before the imposition of…

A: Tax revenue is defined as the revenues collected from taxes on income and profits, social security…

Q: The tax-inclusive price of a carton of cigarettes in Canada is $100 per carton. Per capita…

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Q: The supply for gasoline is more elastic than the demand of gasoline. If gasoline is taxed $1 per…

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Q: Suppose that the demand and supply functions for a good are given as follows: Demand: Q = 720 – 8P…

A: Demand : Qd=720-8P Supply : Qs=-160+3P Equilibrium: Demand=Supply Qd=Qs 720-8P=-160+3P…

Q: Please answer these two questions using the information from above: The government wants to increase…

A:

Q: Suppose supply is P= 4 + (1/4)Qs and demand is P= 58 ―(1/2)Qd. Suppose at the market equilibrium,…

A: Given  At equilibrium, Price elasticity of demand Ed=109 Price elasticity of supply: PS=59 Formula…

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Q: Suppose the government applies a specific tax to a good where the demand elasticity is -0.8, and the…

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Q: Assume that the price of soft drinks is $5 and the government decides instead to impose a $1 tax per…

A: Here, the price of soft drinks is given as $5 and the government imposes a $1 tax on producers. It…

Q: If a tax of $1.20 is imposed on consumers in this market, what is the tax revenue?

A:

Q: Daniel and Jacob like soda drinks. Jacob's demand for soda is: P=10-Q; the demand for Daniel is…

A: Demand and supply forces in the market interact to give the market equilibrium condition. A tax…

Q: Suppose the elasticity of demand for a product is 0 and the elasticity of supply is 1. If the…

A: The incidence of taxation refers to the distribution of the economic burden of a tax among various…

Q: Suppose a $1 tax is imposed on cigarette manufacturers, which of the following will occur? Group of…

A: Tax Incidence:- A tax incidence is a situation whenever the tax burden is shared by market…

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A: 1. Quotas:Quotas restrict the quantity of a particular agricultural product that can be produced and…

Q: Suppose the equilibrium price in a market is $4. If a $4 per-unit tax is levied on the market, the…

A: The tax burden can be divided between sellers and buyers depending on the elasticity of supply and…

Q: All provinces impose sales taxes on gasoline, a good that is recognized to be price inelastic.…

A: The measure that depicts the percentage change in quantity being demanded of goods with respect to…

Q: nsider the following supply and demand curves Price = 35-4*Q Price = 3*Q Suppose the government…

A: The equilibrium is set up where the demand and supply forces are equal. The given demand and supply…

Q: The equilibrium price of a good is $9. The demand for this good is more elastic than the supply.…

A: Elasticity of demand depicts how much consumer responds with the change in price level.

Q: The local government decides to impose a sales tax on some selected items. On item X the final…

A: No, It's not a violation of the law of demand

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A: Equilibrium is achieved at the output level where Qs equals Qd

Q: upply or Demand

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

Q: Suppose that a tax is placed on a particular good. If the consumers pay a higher share of the tax,…

A: Elasticity measures the responsiveness of quantity to changes in price level