Suppose the demand curve for a good is highly elastic and the supply curve is highly inelastic. If the government taxes this good, O buyers and sellers will each share 50 percent of the burden, regardless of the elasticities of the demand and supply curves. sellers will bear a larger share of the tax burden. the distribution of the burden will depend upon whether the buyers or the sellers are required to send the tax to the government. buyers will bear a larger share of the tax burden.

Q: The burden of a tax and the benefit of a subsidy falls mainly on consumers: O A. if the quantity…

A: Elasticity is the responsiveness of change in quantity due to change in price.

Q: Suppose that the price elasticity of beer demand is 0.8 (Ea = 0.8) and the price elasticity of beer…

A: The formula for determining the consumer's tax burden is: (Elasticity of Supply)/(Sum of both…

Q: Time left U:36:11 When the price elasticity of demand is low and the price elasticity of supply is…

A: Share of burden of tax depends on relative elasticities of demand and supply. Higher the elasticity,…

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

A: a)

Q: Suppose that the demand and supply functions for a good are given as follows: 1728 Demand: Q %3D…

A: Demand: Q = (1728 / P) Supply: Q = P2 At equilibrium, demand = supply => (1728 / P) = P2 =>…

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: 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: The demand and supply equations for a product are: Qd= 300 – 6P and Qs= -40 + 6P. Determine the…

A: Market equilibrium is attained where the quantity demanded and the quantity supplied are equal.

Q: Cars P S D Suppose that your city puts an excise tax on cars but collects the tax from car buyers…

A:

Q: - Now suppose that the Demand curve is actually slightly more inelastic, and the Supply curve is…

A: (Since you have posted multiple sub-parts, we will answer the first three for you. If you want a…

Q: The more inelastic the supply. OA. the larger the portion of the tax paid by producers. B. the more…

A: Price Elasticity of supply measures the responsiveness of quantity supplied with respect to change…

Q: Suppose that the government has decided to place a $2 per litre tax on soft drinks. In this market,…

A: The economics as a study is based upon the idea and decision making where the resources are to be…

Q: Suppose that demand for gasoline is 0.5 (Ed=0.5) and the supply of gasoline pizza is 1.25 (E,=…

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

Q: If the government is considering implementing a tax on lumber used in the production of new houses.…

A: A deadweight loss is considered to be a cost to the society which is being created by the…

Q: The price elasticity of demand for lychee fruit is 1.3, while the price elasticity of supply is 0.7.…

A: Here, price elasticity of demand is given as 1.3 and price elasticity of supply is given as 0.7.…

Q: Deadweight loss is defined as O a) the dollar cost of a tax per unit of sale. O b) the cost to…

A: In perfectly competitive market, there is no deadweight loss. Market structures like monopoly and…

Q: Assuming that the price of a pack of cigarettes is $5 before the tax and if the actual price…

A: Price elasticity of demand is defined as the measure of change in the quantity bought of a commodity…

Q: If the government eliminates a tax on a good with a perfectly elastic supply, who benefits most? O…

A: If the government eliminates a tax on a good with a perfectly elastic supply ,who benefits most.

Q: Which area(s) represent the amount of consumer surplus lost due to the tax? O a) B-C O b) B+F O)A c)…

A: Consumer surplus refers to the ads abound the price and below the demand curve.

Q: Calculate the percentage of the tax borne by the demander and supplier in each of the following…

A: The fraction of tax borne by the demanded = ES/(ED+ES) Similarly, for supplier = ED/(ED+ES) A) ED =…

Q: Question 11 Taxes will almost always cause consumer prices to increase. How much they increase…

A: The amount by which the consumer prices increases with increase in tax depends upon tax…

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…

Q: uantity is en the governmen imposes an excise tax of $2 per unit on the production of gadgets.…

A: 45) To computed post tax price, we calculate first change in price  Elasticity of demand = 0.5…

Q: The demand for pastries slopes downward and the supply of pastries slopes upward. Suppose that the…

A: Elasticity measures how responsive is quantity to changes in price level.

Q: When the price elasticity of demand is low and the price elasticity of supply is high, the burden of…

A: Answer: option c (buyers of the product) Explanation: The burden of the tax falls more on buyers if…

Q: The consumers' burden associated with an excise tax will be largest when demand is OA. vertical. B.…

A: The consumer's burden associated with an excise tax will be the largest when demand is vertical.

Q: For a given elasticity of demand, the less elastic the supply, the A) greater is the excess burden…

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

Q: a) What is the Equilibrium Price and Equilibrium Quantity b) If the government imposes a $15 per…

A: We are going to find the tax incidence, equilibrium price and quantity to answer this question.

Q: Deadweight loss is defined as O a) the cost to society created by distortions in the market. O b)…

A: The Deadweight loss (DWL) is created by market inefficiencies.

Q: Consider a family that carns $120,000 per year, pre-tax. Suppose their marginal tax rate on income…

A: Below is the given information: Earning of a Family = $120000 per year Marginal tax rate on income =…

Q: The figure below illustrates the effect of an excise tax (per unit tax) imposed on sellers (S means…

A: Equilibrium in the market occurs at the intersection of demand and supply curves.

Q: 4. Suppose a market has the following supply and demand equations: QD = 380 - 10P and Q = 80 + 5P.…

A: tax revenue refers the revenue collected from the tax and is the revenue for the government here we…

Q: Its is known that the demand function for a product is P = 24 - 1/2Q and the supply function Q = 4 +…

A: Demand:  P = 24 - 1/2Q Q = 4 + 2P P= Q/2-2 Equilibrium: Q=22 units, P= IDR13 After subsidy: Supply-…

Q: If the demand for private planes is elastic compared to the supply, then the burden of a luxury tax…

A: In an economy, various taxes are imposed on different products to reduce income inequality or get…

Q: Suppose the price elasticity of demand for smartphones is 0.5 (absolute value), while the price…

A: PED (price elasticity of demand) = 0.5PES (price elasticity of supply) = 1.9Because PES > PED, it…

Q: A tax is imposed on producers of a good. For a given supply curve, the more price elastic the demand…

A: When the tax is imposed on the producers of a good, then for a given supply curve the more price…

Q: Suppose demand for good X is given by QD = 900- 1/2P where p is the price and QD the quantity…

A: Given  QD = 900- 1/2P QD = 900- 0.5P QS = 1/4P QS = 0.25P At equilibrium  QD = QS 900- 0.5P = 0.25P…

Q: Figure 18-2 shows the widget market before and after an excise tax is imposed. What percentage of…

A: The price paid by the consumer before tax imposition is $100 (where the demand curve is equal to…

Q: 1. The monthly demand function is pp = 26,000,000 -qand the supply function %3D before taxation is…

A: Inverse Demand: Pd = 26000000 - 1/3q2  Inverse Supply: Ps = 1000000+3750q

Q: Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer…

A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Q: D D Question 30 Find the tax burden on sellers per unit of quantity. Answer: The tax burden on…

A: A sales tax paid by buyers shifts the demand curve, while a tax paid by sellers shifts the supply…

Q: If the government levies a tax on a good for which the demand is more price elastic tha the sppfe…

A: In a market, when government imposes tax on any commodity, the tax burden on the market participants…

Q: Given the demand and supply equations below, show the burden of a 50% tax on the producers. What is…

A: Per unit tax as well as percentage tax if collected from sellers shifts the supply curve upward,…

Q: The government is worried about high rates of cigarette smoking and so it's considering implementing…

A: In an economy, when demand for a cigarette is very inelastic and the supply of cigarettes is…