3 3 pointsThe figure below shows the market for snowboards in the state of Colorado. The Colorado state legislature has imposed a sales of tax on eachsnowboard sold. Assume that the pre-tax price of a snowboard was $50. After the tax, consumers are paying $55 per snowboard while firms arereceiving $40 per snowboard.DIArse1The tax burden on households is$300000O $5$10$15$20SeptO100

A sales tax is paid to the government on every unit that is sold in the market.Tax creates a rift…

Answered: The tax burden on households is $30 O…

Business

Economics

The tax burden on households is $30 O $5 $10 $15 $20 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. You pay a marginal rate of 3% on the first $10,000 of income and a marginal rate of 5% on the second $10,000 of income. You make $18,000 a year, how much is your income tax?
Sue earns $60,000 per year and pays $12,000 in taxes. She gets a raise and now earns $100,000 per year and pays $16,000 in taxes. The tax system here is. flat O proportional regressive O progressive
2. When airfares between Santa Rosa and Los Angeles averages $69, the quantity consumed is 42,500 tickets. One day, an airline tax is levied equal to $10.00 and output falls to 37,000 tickets. Assume that air travelers end up paying 75% of the tax. Total expenditures or sales of air travel will be____. Total revenues generated by airlines will be _____ Total tax revenue generated by the government will be ____ Total taxes paid by air travelers will be ____ Total taxes paid by airlines will be ____ Calculate the price elasticity of demand and & interpret coefficient. Use the general formula, not the mid point formula Calculate the price elasticity of supply and interpret coefficient. Use the general formula, not the mid point formula. How do total sales in the airline market before and after the tax support your answer in (n) and/or (o)?
5. Calculating tax incidence Suppose that the local government of Santa Fe decides to institute a tax on seltzer consumers. Before the tax, 20,000 packs of seltzer were sold ever week at a price of $11 per pack. After the tax, 14,000 packs of seltzer are sold every week; consumers pay $14 per pack (including the tax), and producers receive $7 per pack. The amount of the tax on a pack of seltzer is $ burden that falls on producers is $ O True per pack. True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. False per pack. Of this amount, the burden that falls on consumers is $ per pack, and the
Identify whether each of the following taxes is progressive or regressive and indicate in each case where you think the tax incidence lies. d. The federal personal income tax is O proportional, and the incident is on the taxpayer. O average, and the incident is on the consumer. O progressive, and the incident is on the taxpayer. O regressive, and the incident is on the taxpayer. e. A 4 percent state general sales tax is O proportional, and the incident is on the consumer. O regressive, and the incident is on the consumer. O average, and the incident is on the consumer. O progressive, and the incident is on the taxpayer. f. A federal excise tax on automobile tires is O progressive, and the incident is on the taxpayer. O proportional, and the incident is on the consumer. O regressive, and the incident is on the consumer. O average, and the incident is on the consumer.
5. The tax system is used to reduce income inequality through the use of _____ taxes. Select one: a. progressive b. regressive c. efficiency offset d. proportional.?
suppose Lena makes $50000 per year and Mariah makes $65000 per year. If each pays $5000 in taxes: What would their individual tax rates be? Would you describe this tax system as proportional, progressive, or regressive?
With respect to the sources of state tax revenue, the corporate income tax generates approximately twice the revenue as state sales and use taxes. O True O False
Q
5. Calculating tax incidence Suppose that the local government of Corpus Christi decides to institute a tax on cider producers. Before the tax, 40,000 cases of cider were sold every week at a price of $11 per case. After the tax, 34,000 cases of cider are sold every week; consumers pay $13 per case, and producers receive $6 per case (after paying the tax). The amount of the tax on a case of cider is S burden that falls on producers is O True per case. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O False per case. Of this amount, the burden that falls on consumers is $ per case, and the
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 25 billion cases of beer were sold every year at a price of $5 per case. After the tax, 18 billion cases of beer are sold every year; consumers pay $6 per case, and producers receive $3 per case (after paying the tax). The amount of the tax on a case of beer is S per case. Of this amount, the burden that falls on consumers is per case, and the burden that falls on producers is S per case. True or Falser The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers. True O False
8. Explain why each of the following taxes is progressive or regressive. a. $1 per pack federal excise tax on cigarettes b. The federal individual income tax d. The federal payroll tax.