The data describes the market for luxury boats. Now the government puts 10 percent tax on luxury boats. With the tax imposed, the price of a luxury boat is, O A. $0.40 million B. $4.20 million O C. $4 million D. $400 million E. $4.40 million With the 10 percent tax on luxury boats, O A. the tax reduces the quantity of luxury boats sold to zero, so there is no tax. B. the buyer pays all of the tax. O C. the seller pays all of the tax. O D. the buyer and the seller split the tax evenly. O E. it is impossible to say how the tax is split between the buyer and seller. The government raises tax revenue of $ >>> Answer to 1 decimal place. million. .....
The data describes the market for luxury boats. Now the government puts 10 percent tax on luxury boats. With the tax imposed, the price of a luxury boat is, O A. $0.40 million B. $4.20 million O C. $4 million D. $400 million E. $4.40 million With the 10 percent tax on luxury boats, O A. the tax reduces the quantity of luxury boats sold to zero, so there is no tax. B. the buyer pays all of the tax. O C. the seller pays all of the tax. O D. the buyer and the seller split the tax evenly. O E. it is impossible to say how the tax is split between the buyer and seller. The government raises tax revenue of $ >>> Answer to 1 decimal place. million. .....
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Q28
NOT GRADED THIS IS A PRACTICE REVIEW
Transcribed Image Text:The data describes the market for luxury boats.
The supply of luxury boats is perfectly elastic, the demand for luxury boats is unit
elastic, and with no tax on luxury boats the price is $4 million and 400 luxury
boats a week are bought.
Now the government puts 10 percent tax on luxury boats.
With the tax imposed, the price of a luxury boat is
A. $0.40 million
B. $4.20 million
C. $4 million
D. $400 million
E.
$4.40 million
With the 10 percent tax on luxury boats,
O A. the tax reduces the quantity of luxury boats sold to zero, so there is no
tax.
B. the buyer pays all of the tax.
C. the seller pays all of the tax.
D. the buyer and the seller split the tax evenly.
E. it is impossible to say how the tax is split between the buyer and seller.
The government raises tax revenue of $
million.
>>> Answer to 1 decimal place.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education