Question 11 Explain how do the tax incidence and deadweight loss of a commodity tax vary with the elasticities of demand and supply (you do NOT have to refer to the specific demand and supply in the exercise above. You have to discuss, in general, how the elasticities of demand and supply affects the tax incidence and deadweight loss. A BIEEP E

Question 11 Explain how do the tax incidence and deadweight loss of a commodity tax vary with the elasticities of demand and supply (you do NOT have to refer to the specific demand and supply in the exercise above. You have to discuss, in general, how the elasticities of demand and supply affects the tax incidence and deadweight loss. A BIEEP E

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 4 Figure #3: The graph below represents a $10 per unit tax on a good then the amount bought and sold in the market is only 4 units. Note that Q represents quantity and P represents price. P. 24 20 A 16 Supply 12 GIH 8. 4. K M Demand 4 6 10 12 14 16 Refer to Figure #3. The government collects tax revenue that is (or are) the area(s) represented by the area OF-G-L OL OB-D Oc-F
What is the incidence of an excise tax when demand is highly inelastic? Highly elastic? What effect does the elasticity of supply have on the incidence of an excise tax? What is the effifi ciency loss of a tax, and how does it relate to elasticity of demand and supply?
The greater the elasticity of demand, the smaller the deadweight loss of a tax. True False
1. Consider the market for rubber bands. If this market has very elastic supply and very inelastic demand, how would the burden of a tax on rubber bands be shared between consumers and producers? Use the tools of consumer surplus and producer surplus in syour answer. a. b. If this market has very inelastic supply and very elastic demand, how would the burden of a tax on rubber bands be shared between consumers and producers? Contrast your answer with your answer to part (a).
．How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.
Which of the following statements is correct regarding a tax on a good and the resulting deadweight loss? The greater are the price elasticities of supply and demand, the greater is the deadweight loss. The greater is the price elasticity of supply and the smaller is the price elasticity of demand, the greater is the deadweight loss. The smaller are the decreases in quantity demanded and quantity supplied, the greater the deadweight loss. The smaller is the wedge between the effective price to sellers and the effective price to buyers, the greater is the deadweight loss.
Question 39 Please refer to the description of a tax on a market, represented by the graphic What is the price that the seller receives (net of tax) after the tax is imposed?
How do the elasticities of supply and demand affectthe deadweight loss of a tax? Why do they have thiseffect?
If elasticity of demand is greater than elasticity of supply, more tax incidence will be on who? A. Seller B. Buyer
To determine who bears the greater share of a tax, we compare the اختر أحد الخيارات .a. elasticity of supply to the elasticity of demand O .b. pre-tax quantity to the post-tax quantity O .C. government tax revenue to the revenue collected by the suppliers O .d. size of the tax to the price of the good O .e. number of buyers to the number of sellers O