QUESTION 10The burden of a tax per unit of output will fall heavily on consumers when demand is relativelya. inelastic; inelastic8 8 8b. elastic; elasticc.inelastic; elasticd. elastic; inelasticand supply is relatively

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

QUESTION 10 The burden of a tax per unit of output will fall heavily on consumers when demand is relatively a. inelastic; inelastic b. elastic; elastic c. inelastic; elastic d. elastic; inelastic and supply is relatively.

QUESTION 10 The burden of a tax per unit of output will fall heavily on consumers when demand is relatively a. inelastic; inelastic b. elastic; elastic c. inelastic; elastic d. elastic; inelastic and supply is relatively.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 6CQQ

See similar textbooks

Related questions

Q: Had the demand for pumpkins been perfectly inelastic at Point. A, the price elasticity of demand for…

A: Price elasticity of demand is a measurement of the change in the consumption of a product in…

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

A: a)

Q: .The supply of meat is more elastic in the long run than in the short run. Ceteris paribus, as time…

A: Tax burden refers to the economic impact or cost of a tax on the different agents involved in an…

Q: Suppose that in Australia the price elasticity of steel demand of -1.5 and the price elasticity of…

A: "Price elasticity of demand measures the responsiveness of quantity demanded of a commodity with…

Q: When a good is taxed, the burden of the tax fallsmainly on consumers ifa. the tax is levied on…

A: Tax: A compulsory payment to state revenue levied by the government on worker's income and firm's…

Q: The elasticity of demand for maracas is –2.0, and the elasticity of supply is 3.0. How much will the…

A: The elasticity of demand refers to the responsiveness of quantity demanded with respect to a change…

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: What is the relationship between total revenue and own-price elasticity of demand?

A: Price Elasticity of Demand: Measures the percentage change in quantity demanded by percentage…

Q: A new tax is imposed in a market with inelastic supply and inelastic demand. What do we know about…

A: When talking about deadweight loss, it can be said that it is the amount of total output or income…

Q: Suppose a tax of $20 is placed on televisions. If this market's supply and demand curves' are…

A: Meaning of Price Elasticity of Demand: The price elasticity of demand refers to the situation…

Q: c) What is the demand elasticity at the equilibrium of 2022? What is the supply elasticity? Which…

A: Thank you for the question. According to Bartleby's answering guidelines, we answer only the first 3…

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: The Ramesy rule suggest that society should a. All of these answers are correct b. tax a few goods…

A: The Ramsey rule suggests that goods should be taxed in an inverse proportion to the elasticity of…

Q: 29. Suppose the absolute value of elasticity of demand for flat screen TVs is 3.00 and the…

A: Tax incidence:It is a necessary payment that is made to the government for the consumption of goods…

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: Suppose the market for cigarette is competitive. An economist estimates the price elasticity of…

A: It is given that elasticity of demand= -0.8, and elasticity of supply=0.7 is inelastic in nature.…

Q: government increase VAT on some commodities in order to raise revenue the market for X was at…

A: Given: The per-unit tax rate is = $50 The quantity sold was = 5,000 units The price elasticity of…

Q: Neither the demand nor the supply of automobiles is perfectly elastic or inelastic. If the…

A: An excise tax is a tax on each unit of a commodity.

Q: The market for commodity Z was at equilibrim before tax at price Ksh. 50 per unit sold and the…

A: Equilibrium Quantity = 5000 units Equilbrium price after tax = 0.50 Equilbrium price after tax =…

Q: indicate whether you think the statement is true or false and explain why. 9. Natural gas and coal…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Calculate, interpret and try to explain where applicable in each question, why the elasticities of…

A: Most customers are price sensitive across most markets, and it is anticipated that if a good or…

Q: The steel industry has been able to get a law passed that guarantees that steel will be sold for…

A: At a marketplace, when market price differs from the equilibrium level of price, there will be…

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: Suppose that the Australian government imposes a sales tax on a product and both buyers and sellers…

A: Meaning of Price Elasticity of Demand: The price elasticity of demand refers to the situation…

Q: When the absolute value of price elasticity of demand is greater than the absolute value of price of…

A: The customers will bear a larger fraction of the tax imposed if the demand (dd) is going to remain…

Q: Exercise 4 The government has imposed a new tax on all airline travel. The market has two types of…

A: Intermediate Microeconomics is a core economic theory course that will improve a student's ability…

Q: A sales tax is imposed on good A. The supply of good A is not perfectly elastic or perfectly…

A: Part a) The tax incidence depends on the relative price elasticity of supply and demand. When supply…

Q: . Oman started imposing a 15% tax on cigarettes. As a result, product’s price went up, and the sales…

A: Demand is a part of economics study that helps in identifying the quantity of goods needed by the…

Question

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1: Define elasticity of demand and supply and explain how it can affect the share of tax burden.

VIEW

Step 2: Explain the correct option for it's rationale.

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Describe the general appearance of a demand or a supply curve with infinite elasticity.
In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?
The price of coffee rose sharply last month, while the quantity sold remained the same. Five people suggest various explanations: Leonard: Demand increased, but supply was perfectly inelastic. Sheldon: Demand increased, but it was perfectly inelastic. Penny: Demand increased, but supply decreased at the same time. Howard: Supply decreased, but demand was unit elastic. Raj: Supply decreased, but demand was perfectly inelastic. Who could possibly be right? Use graphs to explain your answer.
If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
Why is the demand curve with constant unitary elasticity concave?
If demand is elastic, will shifts in supply have a larger effect on equilibrium quantity or on price?
Explain why using the midpoint formula for calculating the elasticity of demand gives the same result whether price increases or decreases, but using the initial price and quantity instead of the average does not.
The supply of paintings by Leonardo Da Vinci, who painted the Mona Lisa and The Last Supper and died in 1519, is highly inelastic. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that demand for these paintings will determine the price.
Under which circumstances does line tax burden fall entirely on consumers?
When someones kidneys fail, the person needs to have medical treatment with a dialysis machine (unless or until they receive a kidney transplant) or they will die. Sketch a supply and demand diagram, paying attention to the appropriate elasticities, to illustrate that the supply of such dialysis machines will primarily determine the pure.
If demand is inelastic, will shifts in supply have a larger effect on equilibrium price or on quantity?
The equation for a supply curve is 4P=Q. What is the elasticity of supply as price rises from 3 to 4? What is the elasticity of supply as the price rises from 7 to 8? Would you expect these answers to be the same?