Your state legislature is considering increasing the sales tax on two different commodities:prescription drugs and restaurant meals. You estimate owm-price elasticity of demand forprescription drugs Lo be -0.08 and uwn-price elasticity of dermard for reslaurant meals lo be -0.95. Ifthe legislaturc's primary gnal in incrcasing taxcs is to raiscmoncy most efficiontly (i.c., minimizing theresulting deadweight loss), it should taxbullıdrugs and restaurant meals equally.drugs bccausc domand is morc pricc inclastic.reslaurant meals Lecause lhey are nol a rnecessily.only thosc prescription drugs that arc not lifc saving.restaurant meals because demand is more price elastic.

The following information is given: The own-price elasticity of demand for prescription drugs =…

Answered: Your state legislature is considering…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Price (per ton) $60 50 20 60 70 Quantity (millions of tons) Refer to Figure 4-8. The supply curve S₁ and the demand curve D indicate initial conditions in the market for soft coal. A $40-per-ton tax on soft coal is levied, shifting the supply curve from S₁ to S 2. Which of the following states the actual burden of the tax? O $10 for buyers and $30 for sellers $30 for buyers and $10 for sellers $2 The entire $40 falls on sellers. The entire $40 falls on buyers.
Price (dollars per hour) Select one: O A. perfectly inelastic. OB. elastic. OC. inelastic. OD. unit elastic. O E. perfectly elastic. 7.00 6.60 6.00 5.60 5.00 0 1 2 3 4 5 S + tax 6 7 8 Quantity (thousands of frisbees) Figure 6.3.1 Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed. At a quantity of 4,500 frisbees, supply is
Typed plz and Asap thanks
#17
Ciear my cnoice 43. A tax paid by buyers shifts the supply curve, while a tax paid by sellers shifts the demand curve. However, the outcome is the same regardless of who pays the tax. Select one: O a. True O b. False Figure 64 Price 4
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
please answer it legible and clear with complete solutiuon and asnwer it all... thank you
3.
11.00 Ob. 1/5 Oc 1/3 O d. 3/4 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 2100 1800 Supply Demand 2400 Suppose that a $3 tax was imposed on the market above, what is the consumer tax-incidence? a. 2/3
7. Taxation - An algebraic approach Suppose the supply of a good is given by the equation Q1,200P-1,200, and the demand for the good is given by the equation QD 2,400-400P, where quantity (Q) is measured in millions of units and price (P) is measured in dollars per unit. The government decides to levy an excise tax of $1.00 per unit on the good, to be paid by the seller. Calculate the value of each of the following, before the tax and after the tax, to complete the table that follows: 1. The equilibrium quantity produced 2. The equilibrium price consumers pay for the good 3. The price received by sellers Equilibrium Quantity (Millions of units) Equilibrium Price per Unit Paid by Consumers Price per Unit Received by Sellers Before Tax The government receives After Taxi Given the information you calculated in the preceding table, the tax incidence on consumers is on producers is per unit of the good: per unit of the good, and the tax incidence in tax revenue from levying an excise tax of…
The government is worried about high rates of cigarette smoking and so it's considering implementing a cigarettes tax. The government knows that the demand for cigarettes is very inelastic, and the supply of cigarettes is perfectly elastic. Which of the following statements are true? (Select all that apply.) O a. It doesn't matter how the tax is implemented. O b. There are positive externalities associated with smoking. O c. Smoking will decrease only slightly in the short-run. O d. Regardless of how the tax is implemented, consumers will pay the full amount of the tax. O e. The government will collect more revenue if the tax is on the suppliers. O f. Consumers and suppliers will split the burden of the tax. O g. Smoking will decrease more if the tax is the on the suppliers. O h. A tax on cigarettes is one way to make smokers internalize the cost of the externalities associated with smoking. O i. Smoking will decrease more in the long-run than in the short-run. O j. Smoking will…
Comcast has a cable monopoly. The following graph shows the demand, MR, and MC curve of Comcast. Use the graph to answer questions 3 to 8. Price (P) and Costs (in dollars per subscription) $25 $22 $21 $20 $19 0 5 6.5 MC 7 MR ATC Q (Number of subscriptions in millions per month)

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

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

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

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

SEE MORE TEXTBOOKS