Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 8, Problem 4MCQ
To determine
To identify:
The option that correctly states the impact on the wage rate if the demand for labor is more elastic than the supply of labor.
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Students have asked these similar questions
Assume that the demand for coal is more elastic than the supply. A tax on coal will
a.
increase the price of coal paid by buyers, and sellers bear a smaller burden of the tax
b.
decrease the price of coal that sellers really get, and sellers have to bear a bigger burden of the tax
c.
decrease the price of coal paid by buyers, and buyers have to bear a bigger burden of the tax
d.
increase the price of coal that sellers really get, and buyers bear a smaller burden of the tax
Figure 4-22
Price
Market (a)
Market (b)
Pricel
D
Quantity
Refer to Figure 4-22. In which market would the actual burden of a tax fall most heavily on the seller?
Quantity
Market (c)
In none of the markets, as taxes only burden buyers
Price
Quantity
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.6 and 0.8 respectively. a. 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. b. Suppose the government imposes a per-unit tax of $40 on the cigarette sellers. By how much would buyers and sellers of cigarettes share the tax burden respectively? Show your calculation. c. Suppose many small sellers, such as newsstands, complain the heavy tax burden borne by them. Would it be better to these small sellers if the government decides to impose a $20 per-unit tax on both the buyers and the sellers of cigarette? Explain.
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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- Price NA GOREN $20 18 16 14 10 D DAfter Tax 0 10 20 30 40 50 60 70 80 90 Quantity According to the graph, the price sellers will receive after the tax is imposed is $18.00. $14.00. $12.00. $8.00.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_forwardThe reason which determines the elasticity of tax burden on buyers and sellers.arrow_forward
- When demand is elastic Draw a diagram and explain how consumer burden is determined how producer burden is determined who pays the bigger burden of the tax how tax affects the efficiency of the market clearly explain and show the government tax revenue clearly explain and show the deadweight lossarrow_forwardPrice (dollars per pizza) 18 8 6 A 2 S+ tax on sellers S D 0 10 20 30 40 50 60 70 80 90 100 Quantity (thousands of pizzas) The figure above shows the pizza market in the city of Pepperoniville. If the government imposes the sales tax shown in the figure on sellers, then the price the buyer pays for pizza is $ and the price the seller receives for the pizza is $ Just enter value. Do not include the "$" sign.arrow_forwardWith a tax of Rs4/unit,the price of the good rises from Rs5/unit to Rs9/unit. Which of the following statements is true a. Price elasticity of demand is equal to price elasticity of supply b. Demand for the product is perfectly elastic c. Price elasticity of demand is equal to infinity d. Demand for the product is perfectly inelasticarrow_forward
- The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided ?between the buyers and sellers The sellers will pay more of the tax than the buyers .a O The sellers and buyers will split the tax evenly .b O .The sellers will pay the entire tax .c O The buyers will pay more of the tax than the sellers .d Oarrow_forwardwhy is the tax rate 6?arrow_forwardPrice (dollars per case) $33.25 27 22 20 Tax 50 90 Supply with tax Supply Demand Quantity (thousands of cases) The figure shows the market for beer. The government plans to impose a per-unit tax in this market. How much is the excess burden?arrow_forward
- Only typed answerarrow_forwardA government intervenes in a market and as a result the demand curve shifts to the right. Which government measure could cause this effect? Pick a,b,c, or d a. A subsidy granted to producers of the product b. A subsidy granted to consumers of the product c. The imposition of an indirect tax d. The imposition of a direct taxarrow_forwardThe incidence of a tax falls more heavily on: A. Consumers than producers if demand is more inelastic than supply B. Producers than consumers of supply is more inelastic than demand C. Consumers than producers if supply is more elastic than demand D. All of the above are correctarrow_forward
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