Principles of Microeconomics
7th Edition
ISBN: 9781305156050
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 12, Problem 4CQQ
To determine
The application on which the policy of toll tax is based.
Expert Solution & Answer
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The government raises revenue through taxation to pay for the services it provides.
a. True
b. False
Tax incidence usually falls
A. only on producers.
B. on both consumers and producers.
C. only on consumers.
D. on the government.
To minimize deadweight loss associated with taxation, policy makers should
A.impose flat tax rates instead of progressive tax rates.
B.impose taxes in markets with positive externalities.
C.all of these
D.impose taxes in markets with imperfect competition.
Chapter 12 Solutions
Principles of Microeconomics
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Similar questions
- Analyze taxes on tobacco through the perspective of: a. a smoker b. a cigarette firmarrow_forwardWhat is free-riding? Is it positively related to tax revenue or other way if it is a problem for the government suggest remedies for it?arrow_forwardIf the production of computer chips yields greater technology spillovers than the production of potato chips, the government should Select one: a. discourage the production of computer chips with taxes. b. discourage the production of potato chips with taxes. c. encourage the production of potato chips with subsidies. d. encourage the production of computer Ichips with subsidies.arrow_forward
- A pollution tax: A increases the price of the good taxed. B decreases the price of the good taxed. C increases the production of the good taxed. Dincreases the quantity ofthe taxed good demanded.arrow_forward1. What are the Five most common Types of Taxes? Give Examples.arrow_forwardMarked out of1.00 When the price elasticity of demand is high and the price elasticity of supply is low, the burden of a tax falls primarily or Select one. a. buyers of the product. b. both buyers and sellers of the product equally C. the tax payers. d. sellers of the product. CLEAR MY CHOICEarrow_forward
- A. Economic profit is an indication that consumers are willing to pay more for a good or service being offered. True False B. An advantage of tradable permits over emission taxes is that no knowledge of marginal abatement costs is needed to ensure that the tax rate is optimal. the regulator sets the price of permits. the regulator does not have to determine how much to reduce pollution levels. the regulator must set the optimal tax rate.arrow_forwardQuestion 23 Why might a tax be inefficient? a It distorts behavior, causing the marginal costs to be higher than the marginal benefits b The average cost of the tax is too high. c The tax is politically infeasible. d The tax does not collect enough revenue.arrow_forward1. What is the difference between private and social costs?2. How can the government intervene to force consumers to internalize external costs associated with: a. negative externalities? b. positive externalities?3. Differentiate between public good and common resources.4. What are the advantages of a flat tax system?arrow_forward
- Suppose the government wants to raise additional tax revenues with the least disruption to prevailing demand patterns. For which product should an excise tax (a tax on the seller) be levied? Select one: a. Frosted Flakes b. Liquor c. Coca Cola d. hot tubsarrow_forwardTo determine the optimal amount of a public good to supply, the government must know Question 9Answer a. the price elasticity of demand of each buyer. b. the supply curve of the government. c. everyone's valuation for the public good. d. the revenue of selling the good.arrow_forwardWhen a good is taxed: a. both buyers and sellers of the good are made worse off. b. only buyers are made worse off, because they ultimately bear the burden of the tax. c. only sellers are made worse off, because they ultimately bear the burden of the tax. d. neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy.arrow_forward
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