Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 8, Problem 8MCQ
To determine
To select:
The correct option that states the principal of fairness and its preposition.
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Answer the following questions. You may put your answers on this sheet and upload a picture. You can print this
and draw on your sheet. You can also just redraw the graph on your paper if you are doing this with paper and
pencil. Write the answers and calculations on a separate sheet of paper.
This is the market for bags of cat litter.
Price of Bag of Cat Litter (5)
10
Maximum WTP y=15
Minimum Costly 1.6667
10
20
50
70
Bags of Cat Libec (in thousands)
1. What are the equilibrium price P, and quantity Q, in this market? Identify them in the graph.
2. Calculate consumer surplus and producer surplus for the equilibrium. Include your formula and show your
work.
3. Suppose there is a $5.00 tax imposed on this market. Draw in the tax and label the quantity produced as Qr.
(You can estimate where the tax will go. We don't have exact measures with this graph.)
4. What is the price that buyers pay when there is a tax? Label it P, in your graph.
5. What is the price that sellers receive when…
The table shows the market for tulips.
Price
(dollars per
bunch)
Quantity demanded
Quantity supplied
(bunches per week)
10
100
40
12
90
60
14
80
80
16
70
100
18
60
120
If tulips are taxed at $6 a bunch, what is the tax revenue?
Tax revenue is $______ a week.
Discuss justice and fairness while answering the questions.
1. Who should pay for the cost of social housing in the Philippines?
2. Who should carry the burden of taxation?
3. Who should benefit from the taxes?
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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Similar questions
- When a good is taxed: a. both buyers and sellers of the good are made worse off. b. only buyers are made worse off, because they ultimately bear the burden of the tax. c. only sellers are made worse off, because they ultimately bear the burden of the tax. d. neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy.arrow_forwardMultiple Choice Question: 1. The amount of the tax 2. The difference between the price paid by customers and the price received by sellers 3. The tax wedge 4. The total tax revenue generated for the government Give explanation for the answer. please don't provide answer in image format. Thank you.arrow_forwardChoose the Letter of the Correct Answer. 1. It is an act of laying a tax. A. Theory of tax B. Taxation C. Taxing D. Tax 2. A tax imposed by the government at each stage in the production of goods. A. Excise B. Value –added tax C. Property D. Individual tax 3. A tax imposed for the general purposes of the government to raise revenue for the local area needs. A. National B. Municipal C. Community D. Local 4. It is sanction imposed as a punishment for violation of law or acts deemed injurious. A. Tax B. Penalty C. Fine D. Debt 5. This kind of tax is derived from the individuals, corporate estates, and trusts income. A. Income tax B. Capital gains tax C. Donor Tax D. Estate taxarrow_forward
- Question 23 Why might a tax be inefficient? a It distorts behavior, causing the marginal costs to be higher than the marginal benefits b The average cost of the tax is too high. c The tax is politically infeasible. d The tax does not collect enough revenue.arrow_forwardSuppose the government wants to raise additional tax revenues with the least disruption to prevailing demand patterns. For which product should an excise tax (a tax on the seller) be levied? Select one: a.Frosted Flakes b.hot tubs c.Coca Cola d.Liquorarrow_forward1. As a Filipino citizen and one of the many affected by the pandemic, do you think you are entitled of a share from the taxes collected by our government? Explain in 5 sentences. 2. What is your opinion about those who have not paid taxes or the free riders as they called, are they entitled to a share in the community? Explain in 5 sentences.arrow_forward
- Tax incidence refers to ? A. the average tax rate. B.how much revenue a tax generates. C.the extent to which a tax is proportional. D. who bears the burden of a tax.arrow_forwardDiscuss the key tenets of the U.S. personal income tax code. For example, our tax rates are progressive, which means that the more one earns the higher her tax rate. Do you think that this is fair?arrow_forwardQuestion: 2The government is interested in imposing a tax to generate revenue X. It is considering whether they should tax the consumer’s income or impose a tax on a commodity y. What should the government do if they do NOT care about consumer welfare? Use three graphs to illustrate your answer and explain those graphs in your answer.arrow_forward
- Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per gallon.a. What happens when government imposes a tax of 60 cents per gallon on sellers? b. How would such a tax affect the market for gasoline i.e. what is the new equilibrium? c. On whom does the incidence of the tax fall more heavily? d. How much government revenue will be generated by the excise tax? e. What happens when government imposes a tax of 60 cents per gallon on buyers? f. How would such a tax affect the market for gasoline i.e. what is the new equilibrium?arrow_forwardQuestion 6 When a tax per unit is placed on the buyer of a good: a the equilibrium price falls and the total amount spent by the buyer decreases if demand is elastic. b when prices increase from the tax, the supply increases because of the higher price. c the buyer and seller share the burden of the tax with the seller receiving relatively less and the buyer paying relatively more. d the seller charges all of the tax to the buyer since the tax was not placed on the seller.arrow_forwardTax incidence usually falls A. only on producers. B. on both consumers and producers. C. only on consumers. D. on the government.arrow_forward
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