Neither the supply of nor the demand for a good is perfectly elastic or perfectly inelastic. Imposing a tax on the good results in a __________ in the price paid by buyers and _________ in the equilibrium quantity.
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Neither the supply of nor the demand for a good is perfectly elastic or perfectly inelastic. Imposing a tax on the good results in a __________ in the price paid by buyers and _________ in the
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- Why should businesses take into account tax impacts? O a. Taxes directly affect a business's cash flow. Ob. Taxes allow the government to pay for public goods and services O. Taxes reduce the costs of a successful project O d. Taxes increase the gross profit of a business.Suppose households supply 500 billion hours of labor per year and have a tax elasticity of supply of 0.16. If the tax rate is increased by 19.6 percent, by how many hours will the supply of labor decline? a) 28.67 billion b) 1.568 trillion c) 2.465 trillion d) 3.422 trillion e) 9.183 trillionQUESTION 65 Consider the following estimated elasticities regarding the supply and demand of fresh fruits and vegetables. Price elasticity of demand for fruit Price elasticity of supply for fruit Price elasticity of demand for vegetables Income elasticity of demand for fruit Income elasticity of demand for vegetables -0.70 1.60 -0.50 0.60 0.20 If a tax were placed on fruits, which of the following would be true about the burden of the tax? a. The tax will be split between consumers and producers, but the consumers will pay the majority of the tax. b. The tax will be split between consumers and producers, but the producers will pay the majority of the tax. c. Consumers will pay the entire tax. d. Producers will pay the entire tax.
- When airfares between Santa Rosa and Los Angeles averages $69, the quantity consumed is 42,500 tickets. One day, an airline tax is levied equal to $10.00 and output falls to 37,000 tickets. Assume that air travelers end up paying 75% of the tax. Total taxes paid by air travelers will be ____ Total taxes paid by airlines will be ____ Calculate the price elasticity of demand and & interpret coefficient. Use the general formula, not the mid point formula Calculate the price elasticity of supply and interpret coefficient. Use the general formula, not the mid point formula. How do total sales in the airline market before and after the tax support your answer in (n) and/or (o)?185.Suppose the government wanted to impose a tax and wanted the entire burden of the tax to fall on the sellers. What would have to be true of a market for this to be possible? (A) The sellers would have to have a perfectly inelastic supply curve, and the buyers would have to have a perfectly inelastic demand curve. (B) The buyers would have to have a perfectly elastic demand curve, and the sellers must not have a perfectly elastic supply curve. (C) The sellers would have to have a perfectly inelastic supply curve, and buyers must not have a perfectly inelastic demand curve. (D) The buyers would have to have a perfectly inelastic demand curve, and the sellers would need not to have perfectly elastic supply curve. (E) Neither buyer nor seller should have perfectly elastic or perfectly inelastic curves.6. The government decides to place a $6 unit tax on a product. The following elasticities are known: E, = - 1; E,= 2. By how much does the price paid by the demanders increase because of this tax?
- #5 The government imposes an excise tax on house paint. The house paint tax incidence takes place within a market where the supply of house paint is perfectly inelastic and the demand for house paint is perfectly elastic. The excise tax is paid by the government. producers of house paint. consumers of house paint.USA todays business section's top story reads "Agriculture Devasted by president's budget; governemnet cuts spending & funding how will the supply curve for vegetables such as soybeans and broccoli be affected20. Which of the following would increase the short-run supply for a business, regardless of market structure? A-An income tax on consumers. B-A transfer payment. C-A lump-sum production subsidy D-A per-unit production subsidy. E-An excise tax 21.How would the creation of an import quota affect the market for a good? A-Imported supply increases. B-Domestic supply decreases. C-Market price increases D-Consumer surplus increases. E-Producer surplus decreases
- QUESTION 5 A higher amount of a tax imposed by the government will be paid by the buyers. Always. When demand is more inelastic than supply. When supply is more inelastic than demand. Never.The short-run demand and supply elasticities for oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short-run equilibrium quantity is 23.84 million barrels per year. 1. Derive the linear demand and supply equations.2. What will be the effects on the market price and quantity if the government decides to purchase (and store away) an additional 2 million barrels of oil? Assume that the additional consumption of oil by the government results in a parallel shift of the supply curve to the left by 2 million barrels per day.3. What could be the economic rationale for buying and storing oil?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.