1tThe data describes the market for luxury boats.Now the government puts 20 percent tax on luxury boats.With the tax imposed, the price of a luxury boat isOA. $330 millionOB. $1.10 millionOC. $0.20 millionD. $1.20 millionOE. $1 millionaWith the 20 percent tax on luxury boats,OA. the buyer pays all of the tax.OB. the buyer and the seller split the tax evenly.OC. the tax reduces the quantity of luxury boats sold to zero, so there is no tax.OD. it is impossible to say how the tax is split between the buyer and seller.OE. the seller pays all of the tax.9The government raises tax revenue of sZ2WS3edmillinn.AOCсC с$4rf%5vt6.0Oll63byhThe supply of luxury boats is perfectly elastic, the demand for luxury boats is unitelastic, and with no tax on luxury boats the price is $1 million and 330 luxury boatsa week are bought.&7u1.601.401.201.00+0.80+Qn132jPrice (millions of dollars per boat)198264330Quantity (boats per week)sss Draw onhs the nhierte enarifiart in the mastinn*8O(9DImkO)OD$+taxalt396рDQaNext:ctrl[:?1 OB. the buyer and the seller split the tax evenly.O c. the tax reduces the quantity of luxury boats sold to zero, so there is no tax.OD. it is impossible to say how the tax is split between the buyer and seller.O E. the seller pays all of the tax.The government raises tax revenue of $>>> Answer to 1 decimal place.million.The graph shows the market for luxury boats before and after the 20 percent tax is put onluxury boats.Draw a shape that represents the excess burden of the tax.The tax is because at the quantity producedOA. inefficient; marginal benefit exceeds marginal costOB. efficient; marginal benefit exceeds marginal costC. inefficient; marginal cost exceeds marginal benefitD. efficient; the seller receives the price the buyer paysOE. efficient; marginal cost exceeds marginal benefit

Demand is elastic while supply is perfectly inelastic. The equilibrium price where demand = supply,…

The data describes the market for luxury boats. Now the government puts 20 percent tax on luxury boats. With the tax imposed, the price of a luxury boat is OA. $330 million OB. $1.10 million OC. $0.20 million OD. $1.20 million OE. $1 million With the 20 percent tax on luxury boats, OA. the buyer pays all of the tax. B. the buyer and the seller split the tax evenly. OC. the tax reduces the quantity of luxury boats sold to zero, so there is no tax. D. it is impossible to say how the tax is split between the buyer and seller. OE the seller pays all of the tax The novernment raises tax revenue of S million 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 $1 million and 330 luxury boats a week are bought. 1.60 1.40 1.20 1.00 0.80+ 132 Price (millions of dollars per boat) D $+tax 198 264 330 Quantity (boats per week) y Draw only the nhierte enarified in the mission 396 Q Q G

The data describes the market for luxury boats. Now the government puts 20 percent tax on luxury boats. With the tax imposed, the price of a luxury boat is OA. $330 million OB. $1.10 million OC. $0.20 million OD. $1.20 million OE. $1 million With the 20 percent tax on luxury boats, OA. the buyer pays all of the tax. B. the buyer and the seller split the tax evenly. OC. the tax reduces the quantity of luxury boats sold to zero, so there is no tax. D. it is impossible to say how the tax is split between the buyer and seller. OE the seller pays all of the tax The novernment raises tax revenue of S million 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 $1 million and 330 luxury boats a week are bought. 1.60 1.40 1.20 1.00 0.80+ 132 Price (millions of dollars per boat) D $+tax 198 264 330 Quantity (boats per week) y Draw only the nhierte enarified in the mission 396 Q Q G

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Consumers, Producers, And The Efficiency Of Markets

Section: Chapter Questions

Problem 7PA

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Under which circumstances does line tax burden fall entirely on consumers?
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The data describes the market for luxury boats. Now the government puts 30 percent tax on luxury boats. With the tax imposed, the price of a luxury boat is A. $4 million OB. $1.20 million OC. $340 million OD. $5.20 million OE. $4.60 million With the 30 percent tax on luxury boats, A. the buyer pays all of the tax. B. the buyer and the seller split the tax evenly. OC. the tax reduces the quantity of luxury boats sold to zero, so there is no tax. D. the seller pays all of the tax. OE. it is impossible to say how the tax is split between the buyer and seller. The government raises tax revenue of $ million. Selected: none
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