When the price elasticity of demand is low and the price elasticity of supply is high, the burden of a tax falls primarily on Select one: O a. the tax payers. O b. sellers of the product O c. buyers of the product O d. both buyers and sellers of the product equally.

When the price elasticity of demand is low and the price elasticity of supply is high, the burden of a tax falls primarily on Select one: O a. the tax payers. O b. sellers of the product O c. buyers of the product O d. both buyers and sellers of the product equally.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

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: If the supply curve is perfectly elastic, then this suggests that the OA. consumers pay a smaller…

A: The question centers on the implications of a perfectly elastic supply curve, particularly in…

Q: QUESTION 13 Suppose the market for funeral home services is given below: (housands) Dem ard 10…

A: Tax on goods: If the tax imposed on goods and services, the supply decreases, and the supply curve…

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: Refer to Figure 10-5. In order to maximize the welfare of the society, government shoul a. give…

A: An externality, in economics, refers to the unintended side effects or consequences of an economic…

Q: Suppose an ad valorem tax is imposed in which the Consumer Burden of the tax is less than the…

A: The value which is based on the transaction or the property is known as ad voleram tax. The term AD…

Q: $60 50 20 60 70 Quantity (millions of tons) Refer to Figure 4-8. The supply curve S, and the demand…

A: In the free market, the equilibrium price and quantity is determined by the forces of the demand and…

Q: ssible, it should tax: The good with unit elasticity of demand and unit elasticity of supply The…

A: Businesses eliminate deadweight loss in the long run by changing prices to attract customers. Firms…

Q: hich of the following statements is correct?

A: Consumer surplus is the area between the demand curve (below) and above the price. Producer surplus…

Q: QUESTION 3 Figure 1price 10 D 10 20 30 40 50 60 70 80 quantity Refer to Figure. Suppose the…

A: In the production process, the conditions and fluctuations that happen between demand and also the…

Q: 24 EX 16 price 10 b. $16. 70 O c. $6. O d. $24. 100 D Refer to Figure 6-18. The effective price that…

A: Equilibrium in the market is reached at the intersection of demand and supply curves

Q: The following table gives data for the market for a product. Price Per Unit Quantity Demanded…

A: A tax imposed by governments on specific goods or services, typically at the point of production,…

Q: When quantity supplied and quantity demanded are equal, consumer surplus is equal to

A: Consumer surplus is computed as the difference between the maximum price that a potential consumer…

Q: The figure shows the market for tires. According to the figure, the government collects per month in…

A: Tax revenue refers to the revenue collected by the government by imposing on the people of the…

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: If the supply curve is perfectly elastic, then this suggests that the O A. consumers pay a smaller…

A: In order to develop stable equilibria, microeconomic equilibrium arrangements explore numerous…

Q: Use the following information to answer the next fifteen questions. The following graph depicts a…

A: Given:

Q: Total revenue is equal to Select one: O a. price times quantity minus marginal cost. O b. price…

A: 1. Total revenue is the amount earned by selling goods and services. It is calculated by multiplying…

Q: In a recent report it was said that there are health benefits to consuming coffee as it has…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: (This question refers to the MRU video 'The Supply Curve Shifts'.) What effect would a $20 tax have…

Q: A tax imposed on the sellers of a good will raise both the price buyers pay and the effective price…

A: The imposition of a tax refers to the imposition of a charge by a government in order to generate…

Q: Assume that the supply curve for undeveloped land is relatively inelastic. A tax levied on…

A: The concept of elasticity can be defined as the level of responsiveness or sensitivity of one…

Q: Danny $150.00 Tom S135.00 Bob $120.00 Mayank S100.00 Refer to Table. If the above are the four…

A: question 8 consumers buys the product only when price is less than or equals to willingness to pay…

Q: figure 8-6 Price 22 S. 16 tax 12 15 25 Quanelity 50 er to Figure 8-6. What would consumer surplus be…

A: The equilibrium price and equilibrium quantity of a good sold in the market are determined by the…

Q: 3.30 3.00 Supply 2.70 2.40 2.10 1.80 1.50 1.20 0.90 Demand 0.60 0.30 50 100 150 200 250 300 350 400…

A: From the graph, prior to tax, the market-clearing quantity is 150 units and the corresponding price…

Q: A) the government bears most of the incidence of a tax on gasoline. O B) sellers bear most of the…

A: The industry is an important economic part that gives a closely related set of natural resources,…

Q: If the supply curve is more elastic relative to demand, then this suggests that the

A: Elasticity is a measure of the degree of change in demand or supply of a commodity in response to…

Q: Use the following graph for a competitive market to answer the question below. Price & $3.50 $2.50…

A: The demand curve is the downward sloping curve. Supply curve is the upward sloping curve.…

Q: * 7 The supply of luxury boats is perfectly elastic, the demand for luxury boats is unit elastic,…

Q: to Figure. If the government imposed a tax of $6 per unit in this market then which of the following…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Refer to the graph to the right. After the government imposes a price of $3.50 in this market, area…

A: When the government imposes the price of $3.50 in the market, the equilibrium changes as the price…

Q: please answer in text form and in proper format answer with must explanation , calculation for each…

A: I followed these steps:Identified the given demand and supply curves.Determined the equilibrium…

Q: Which of the following statements is false regarding Producer Surplus? O a. Producer surplus is the…

A: The study and evaluation of corporate financial concerns using abstract economic concepts and ideas…

Q: Suppose the government sets a price ceiling of $20 per gallon of gasoline in this market. What is…

A: Given Supply equation Q=4P and Demand equation: Q=200-P Price ceiling set by government at P=$20

Q: Which of the following would most likely lead to the largest deadweight loss (all else equal)?…

A: A deadweight loss can be considered as the cost to society due to improper allocation of resources.…

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: The supply curve in a market is given by P = 3 + 2Q; demand is given by P = 11 - 2Q. Suppose a…

A: Consumer surplus refers to the economic concept representing the monetary gain consumers experience…

Q: The demand and the supply for a good are each neither perfectly elastic nor perfectly inelastic. If…

A: A tax is a financial charge being levied by any government upon an individual or an organization for…

Q: Which best describes producer surplus? O a. The profits made by a firm O b. The difference between…

A: "As per the guidelines answer is provide to the first question": "Producer surplus indicates the…

Q: Suppose the demand for a product is given by P = 30 - 3Q. Also, the supply is given by P = 10 + Q.…

A: Deadweight loss is the reduction in total surplus resulting when socially efficient quantity is not…

Q: ssume that for good X the supply curve for a good is a typical, upward-sloping straight line, and…

A: This question relates to the economic idea of taxation and its effect on business sectors. In…

Q: QUESTION 12 Figure 6-25 1arice 10 is 6 3. D Datertak 10 20 30 40 s0 60 70 80 quantity Refer to…

Q: QUESTION 8 Figure 14 12 10 8 6 4- 2- 10 20 30 40 50 60 70 Refer to Figure. If the government imposed…

A: In case of per unit of tax the burden of tax will fall equally on both the consumers and the buyers.…

Q: please answer in text form and in proper format answer with must explanation , calculation for each…

A: Consumer tax incidence (T) refers to the portion of total tax paid by consumers. It is determined…

Q: QUESTION 17 3.30 3.00 2.70 2.40 2.10 1.80 Supply 1.50. 1.20 Demand 0.90 0.60 0.30 5000 10000 15000…

A: An economic term that is used for understanding the division of a tax burden between buyers and…

Q: 43. A tax paid by buyers shifts the supply curve, while a tax paid by sellers shifts the demand…

A: At a marketplace, when tax is imposed on the market participants, it will lead to affect the market…

Q: 120 110 100 Supply 90 80 70 60 50 40 30 20 10 Demand 5 10 15 20 25 30 35 40 45 50 55 60 QUANTITY…

A: The measure that depicts the cost to society that is being created by the inefficiency of the market…

Question

When the price elasticity of demand is low and the price elasticity of supply is high, the burden of
a tax falls primarily on
Select one:
O a. the tax payers.
b. sellers of the product
Oc. buyers of the product
O d. both buyers and sellers of the product equally.

Expert Solution

Step 1

Answer: option c (buyers of the product)

Explanation:

The burden of the tax falls more on buyers if the demand is less elastic than supply and vice-versa. Since the elasticity of demand is lower than the elasticity of supply the burden will fall more on buyers.

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

QUESTION 2 Andrea is willing to pay a maximum of $1000 for a 50 inches television. She was able to order the television online and earned a consumer surplus of 300. How much she would have paid for that TV? O a. $1,300. O b.$700. O. $300. O d. $1,000. QUESTION 3 In normal circumstances if the government doubles the tax on a product then the resulting deadweight loss will be O a. four times the previous deadweight loss. O b. double of the previous deadweight loss. O c. equals to the previous deadweight loss. O d. less than previous deadweight loss.
Which of the following will most likely lead to the smallest deadweight loss (all else equal)? Select one: A. A payroll tax of $10 B. A mandated benefit that costs $15 and employees value at $4 C. A payroll tax of $7 D. A subsidy of $13 E. A mandated benefit that costs $9 and employees value at $3 O O O O
Suppose a tax of $0.25 is placed on the market depicted below. 090 085 0.80 0.75 0.70 085 060 0.55 050 0.45 0.40 50 100 150 200 250 300 350 400 What is the DWL from the tax? O a. 8.75 O b.15 O C. 10 O d. 12.50
Tax incidence indicates O A. who is not legally required to send a tax payment to the government. O B. who is legally required to send a tax payment to the government. OC. the burden of a tax on consumers. O D. the burden of a tax on producers. O E. the actual division of the burden of a tax.
When a tax is levied on a good, what happens to the market price and why? Select one: O a The market price rises because both quantity demanded and quantity cross out supplied falls. O b. The market price falls because quantity supplied falls. cross out O. The market price falls because quantity demanded falls. cross out O d. The market price rises because both quantity demanded and quantity cross out supplied rises.
Oc
The figure shows the market for tires. According to the figure, the government collects per month in total tax revenue Price (dollars per tire) em O A. $2,000 million S+ tax 70 OB. $1,200 million 60 O C. $600 million 50 D. $900 million 40 O E. None of the above answers is correct. 30 e As 20 t Ass 10 10 20 30 40 50 60 70 Quantity (millions of tires per month) AR 1 O Time Remaining: 00:58:33 Next ompleted This course (ECON202 s2022 online) is based on Bade/Parkin: Foundations of Microeconomics, 9e MacBook Pro
Suppose the market for a product is given by the following S+D functions. price 100 80 60 40 20 20 Demand 40 60 80 100 120 140 How much DWL does a $10 tax create? O a. zero Ob. 200 O c. 600 O d. 400 Supply
O b. True Clear my choice 42. A tax on a good raises the price buyers pay, lowers the price sellers receive, and reduces the quantity sold. Select one: O a. False Ob. True 59. The government should send families $1000 per child even if
Suppose demand and supply of gasoline are given by the following linear functions: Qd = 100 - 20P Qs = 50 + 10P where Q is the quantity in millions of litres and P is the price per litre. Suppose a tax of $1.10 per litre is imposed on gasoline. The deadweight loss equals: O A. $2.13 million O B. $4.03 million OC. $3.33 million O D. $2.70 million
If the government wants to increase the tax revenue they collect from sellers, then it should O Tax goods that have low elasticity of demand and high elasticity of supply. O Tax goods that have high elasticity of demand and supply. Tax goods that have high elasticity of demand and low elasticity of supply. O Tax goods that have low elasticity of demand and supply.
10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 300 600 900 1200 1500 1800 2100 Supply Demand 2400 Suppose that a tax of $3 was inserted into the market above, what would be the new price that consumers pay? O a.7 O b.6 O c. 8 O d.5