EBK PRINCIPLES OF ECONOMICS
8th Edition
ISBN: 8220103600453
Author: Mankiw
Publisher: CENGAGE L
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Question
Chapter 8, Problem 6PA
Subpart (a):
To determine
The impact of very high tax rate.
Subpart (b):
To determine
The impact of very high tax rate.
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Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets.
A 10,000 percent tax on bullet ___ is not/is___ likely to generate a lot of revenue.
Why might Senator Moynihan have proposed it?
To boost the manufacturing industry of hollow-tipped bulletsTo raise revenue to support law enforcementTo discourage the use of hollow-tipped bullets
Suppose that the government wants to tax wealthy people. They notice that only wealthypeople buy yachts. So the government decides to tax yachts. Is this an effective way to tax thewealthy? Explain your answer
Suppose 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 of $45
Some economists believe that a sales tax, in general, is undesirable. Explain. Despite this, why do most countries still impose a tax on cigarette? Explain plausible arguments.
Chapter 8 Solutions
EBK PRINCIPLES OF ECONOMICS
Ch. 8.1 - Prob. 1QQCh. 8.2 - The demand for beer is more elastic than the...Ch. 8.3 - Prob. 3QQCh. 8 - Prob. 1CQQCh. 8 - Prob. 2CQQCh. 8 - Prob. 3CQQCh. 8 - Prob. 4CQQCh. 8 - Prob. 5CQQCh. 8 - Prob. 6CQQCh. 8 - Prob. 1QR
Ch. 8 - Prob. 2QRCh. 8 - Prob. 3QRCh. 8 - Why do experts disagree about whether labor taxes...Ch. 8 - What happens to the deadweight loss and tax...Ch. 8 - Prob. 1PACh. 8 - Prob. 2PACh. 8 - Prob. 3PACh. 8 - Prob. 4PACh. 8 - Prob. 5PACh. 8 - Prob. 6PACh. 8 - Prob. 7PACh. 8 - Prob. 8PACh. 8 - Prob. 9PACh. 8 - Prob. 10PA
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- If the government imposes a tax of 8% on luxury cars that the consumer must pay, why does the consumer not actually pay the full 8%? How is it determined how much the consumer will pay and how much the producer will pay? Is it possible for an 8% tax the government imposes on the consumer to actually have 1% paid by the consumer and 7% by the producer? Why or why not?arrow_forwardCan you also show on diagrams please?arrow_forwardCan you explain with graphs as well pleasearrow_forward
- The tax on cigarettes in New York City is one of the highest in the nation—$5.85 per pack. What are some of the secondary effects of this tax? Check all that apply.arrow_forwardDaniel Patrick Moynihan, the late senator fromNew York, once introduced a bill that would levy a10,000 percent tax on certain hollow-tipped bullets.a. Do you expect that this tax would raise muchrevenue? Why or why not?b. Even if the tax would raise no revenue, why mightSenator Moynihan have proposed it?arrow_forwardWhat is pigovian tax. Explain in detail.arrow_forward
- Suppose 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_forwardWhat if any are the effects of taxation on a normal profit?arrow_forwardWould consumer or producer carry the burden of tax if good is elastic? Show on a grapharrow_forward
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