Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
8th Edition
ISBN: 9781337378710
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 12, Problem 5QR
To determine
Efficiency of the marginal tax rate on the lump-sum tax.
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What is the marginal tax rate on a lump-sum tax?How is this related to the efficiency of the tax?
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Chapter 12 Solutions
Bundle: Principles of Economics, 8th + MindTap Economics, 1 term (6 months) Printed Access Card
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- what are the ultimate effects to society of shortfalls of tax collection?arrow_forwardCertain items, such as gasoline, air travel, hunting equipment, cigarettes, andtelecommunications services, have a special tax added to the purchase price. What is the name ofthis tax?arrow_forwardIn the diagram to the right, illustrating a per-unit tax equal to P, minus P3, tax and the excess burden of the tax revenue is represented by the areas S2 is represented by areas P2 B D A F Quantity (millions per year) Price (dollars per unit)arrow_forward
- why is the tax rate 6?arrow_forwardif the demand curve is very inelastic and the supply curve is very elastic in the market then sellers will bear a greater burdeb of tax inposed on the market even if the tax imposed on buyers.True or falsearrow_forwardsuppose demand is given by q d(p)=1-p and supply q s(p)=p with prices in dollars.if buyers pay a 10 cent tax what is the after tax demand?arrow_forward
- Is it possible to be used partly for public purpose and partly private purpose without violating the limitation that a tax must be for public purpose?arrow_forwardSuppose the demand for a product is given by P = 100 - 2Q. Also, the supply is given by P = 20 + 6Q. If an 8 TL per-unit excise tax is levied on the buyers of a good, what is the price that the producers get after the tax?arrow_forward“Consumers shoulder more tax burden for products with elastic demand relatively to products with inelastic demand”. Evaluate the validity of this statement by considering a unit tax on producers and explain your answers with a suitable market diagram.arrow_forward
- In the diagram to the right, illustrating a per-unit tax equal to P2 minus P3, tax revenue is represented by the areas excess burden of the tax is represented by areas D and E F and G E and G D and F and the D F B E "G C A D Q2 Q₁ Quantity (millions per year) S₂ S₁arrow_forwardHow can the government improve tax collections without imposing much tax to the consumer?arrow_forwardSuppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax on the cigarette sellers. Who, buyers or sellers, would share a heavier tax burden? Explain your answers without calculation.arrow_forward
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