Microeconomics
Microeconomics
10th Edition
ISBN: 9781259655500
Author: David C Colander
Publisher: McGraw-Hill Education
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Chapter 5.1, Problem 8Q
To determine

The impact of imposing tax.

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The equilibrium price of a good is $13$⁢13. Suppose the government introduces a tax on this good. In this case, the price paid by consumers is 1.51.5 times more than the equilibrium price, and the price received by producers is 1.31.3 times less than the equilibrium price. Calculate the amount of tax per good. Enter your answer in the box below and round to two decimal places if necessary.
Suppose that the government imposed a price ceiling on cows. Would you expect theprice of steak to increase, decrease, or stay the same? Explain your answer.
At the current market equilibrium, the price elasticity of supply for a certain good is much lower than the price elasticity of demand. if the government imposes a $5 specific tax on this good, who will bear more of the burden of the tax?
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