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If a sales tax of 5% is imposed on good A. How much of it can be passed on to the buyer, when:
(a) Good A is a normal good
(b) Good A is a necessity
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- In a country the Government determines to increase the tax on gasoline by $0.20 per gallon. The price of gasoline after taxes though only goes up by $0.15. Does this mean the gas station is not collecting the correct amount of taxes?What are the factors that caused the consumer surplus?A loss of purchasing power due to a price increase and a decrease in the amount of one good purchased due to a decrease in price of another good to show two different effects. What are they?
- what are Factors affecting the demand of gasolineWhich product listed is an example of an inferior good?Price (dollars per bushel) 5 4 3. 2. 2 3 4 5 6 Quantity (millions of bushels per year) At harvest time the supply of wheat is perfectly inelastic. If the government taxes wheat at $1 a bushel, then A) the buyer pays the entire tax. B) the seller and the buyer split the tax evenly. C) the seller and the buyer split the tax but the seller pays more. D) the seller pays the entire tax.
- The consumer surplus would be?Does a huge supply of a product lower or higher the price of a product?Consider the market for bus travel, where equilibrium price and quantity is determined by demand and supply. If bus travel is an inferior good and there is an increase in income and at the same time, the government subsidises bus travel, which of the following will occur? (a) The equilibrium price and quantity will be lower. (b) The equilibrium quantity will be higher, but the impact on price will be unknown. (c) The equilibrium price will be lower, but the equilibrium quantity will be higher. (d) The equilibrium price will be lower, but the impact on quantity will be unknown.