Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 8, Problem 2MCQ
To determine
To identify:
The option that correctly states the situation and the people who will pay the tax levied on sugar.
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Suppose that in Australia the price elasticity of steel demand of -1.5 and the price elasticity of steel supply is 1.2. If a tax of $50 per tonne of steel is applied, then:
a. The tax burden on consumers will be greater than the tax burden on suppliers.
b. The tax burden on suppliers will be greater than the tax burden on consumers.
c. The tax burden on consumers will be equal to the tax burden on suppliers.
d. The steel price is unlikely to be substantially affected.
1. What is the relationship between total revenue and own-price elasticity of demand?
2. Illustrate a situation when the producer of a good will have a greater tax incidence than a consumer.What does elasticity have to do with tax incidence?
Question
You are in the business of producing and selling popcorn, cheese, crackers, and wine. The government plans to impose a tax on
one of these products. Based on the elasticities in the table provided, as a profit-minded business person, which good would you
(the business owner) most prefer to have taxed?
Price elasticity Price elasticity
of supply
of demand
Popcorn
1.2
2.0
Cheese
2.2
1.1
Crackers
1.6
1.3
Wine
1.7
1.8
Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.
a
Cheese
b.
Crackers
Рорсоrn
Wine
Chapter 8 Solutions
Foundations of Economics (8th Edition)
Ch. 8 - Prob. 1SPPACh. 8 - Prob. 2SPPACh. 8 - Prob. 3SPPACh. 8 - Prob. 4SPPACh. 8 - Prob. 5SPPACh. 8 - Prob. 6SPPACh. 8 - Prob. 7SPPACh. 8 - Prob. 8SPPACh. 8 - Prob. 9SPPACh. 8 - Prob. 10SPPA
Ch. 8 - Prob. 1IAPACh. 8 - Prob. 2IAPACh. 8 - Prob. 3IAPACh. 8 - Prob. 4IAPACh. 8 - Prob. 5IAPACh. 8 - Prob. 6IAPACh. 8 - Prob. 7IAPACh. 8 - Prob. 8IAPACh. 8 - Prob. 9IAPACh. 8 - Prob. 10IAPACh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQ
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