Question 3 (25 marks) A sugary drink tax or soda tax is a tax designed to reduce consumption of sweetened beverages like carbonated soft drinks. We have heard arguments from those opposing this tax and those supporting the tax. The argument of opponents: tax causes deadweight loss, and therefore is bad for the society. The argument of supporters: sweetened beverages increase the health risk like obesity. Society needs to pay extra cost to tackle these health issues. Thus, sweetened beverages has negative externality and a tax helps correct the situation, and therefore is good for the society Assuming that the tax is imposed on sellers, a. Explain the argument of the opponents using a clearly labeled demand-supply diagram. b. Explain the argument of the supporters using a clearly labeled demand-supply diagram. Question 4 (25 marks) a. Explain the concept of non-rivalness and provide examples. b. Explain the concept of non-excludability and provide examples. Question 5 (25 marks) Discuss the pros and cons of introducing the sales tax in Hong Kong. Question 6 (25 marks) a. Explain the concept of substitution effect in the context of income tax. b. Explain the concept of income effect in the context of income tax.

Question 3 (25 marks) A sugary drink tax or soda tax is a tax designed to reduce consumption of sweetened beverages like carbonated soft drinks. We have heard arguments from those opposing this tax and those supporting the tax. The argument of opponents: tax causes deadweight loss, and therefore is bad for the society. The argument of supporters: sweetened beverages increase the health risk like obesity. Society needs to pay extra cost to tackle these health issues. Thus, sweetened beverages has negative externality and a tax helps correct the situation, and therefore is good for the society Assuming that the tax is imposed on sellers, a. Explain the argument of the opponents using a clearly labeled demand-supply diagram. b. Explain the argument of the supporters using a clearly labeled demand-supply diagram. Question 4 (25 marks) a. Explain the concept of non-rivalness and provide examples. b. Explain the concept of non-excludability and provide examples. Question 5 (25 marks) Discuss the pros and cons of introducing the sales tax in Hong Kong. Question 6 (25 marks) a. Explain the concept of substitution effect in the context of income tax. b. Explain the concept of income effect in the context of income tax.

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 11E: Federal excise taxes on gasoline vary widely across the developed world. The United States has the...

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Federal excise taxes on gasoline vary widely across the developed world. The United States has the lowest taxes at USD $0.40 per gallon (or Â£0.07 per liter), Canada has taxes of $0.60 per gallon, Japan and much of Europe is $2.00 per gallon, while Britain has the highest tax at $2.83 a gallon or Â£0.5 per liter. If gasoline taxes are intended to reduce the time losses from road congestion in urban environments and gasoline pre-tax costs about Â£0.40 per liter, why might the optimal tax in Canada be 50 percent higher than in the United States? What would be an explanation for why adjacent countries would have such different estimates of the price elasticity of demand for auto driving?16
Question 2 Use the graph below to answer questions a-e: Price P1 PO P2 DO $1 SO E1 Q1 EO QO $1 SO DO Quantity a. Based on the above graph, the price sellers and buyers receive before the tax imposed are b. Based on the above graph, the price sellers and buyers will pay after the tax imposed are c. Based on the above graph, the size of the tax that sellers would pay is. ( d. Based on the above graph, the size of the tax that buyers would pay is .. e. Based on the above graph, the total of the tax imposed in this market is.
In State Z, the sales tax rates vary based on the type of goods sold. For clothing items, the tax rate is 5%, and for electronics, the tax rate is 8%. If Sarah purchases a jacket for $50 and a smartphone for $600, how much sales tax does she pay in total? A) $29 B) $44 C) $46 D) $50
ng System (Academic) of estion Price (dollars per CDJ g 8 40 20 10 + tax on seller Select one: S 0 10 20 30 40 50 60 70 80 D A. $200 million OB. $20 million OG $400 million O D. $40 million Quantity (millions of CDs per year] In the above figure, what is the total tax revenue collected by the government?
The company recently changed the selling price of one of its products from ₱50.00 to ₱45.00. The unit sales changed from 2,000 to 2,350. Tax rate is 30%. The product's price elasticity of demand is closest to: a. -0.16 b. -2.12 c. 1.53 d. -1.53 e. -1.97 f. -1.07
If the government is to cover childcare costs, how do you explain it to non-parents who don’t want to bear the costs of childcare through taxes? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
-Discuss the effects of direct taxes on consumer behavior. (It should be composition and it should include minimum 200 words.)
6) The incidence of indirect taxes on suppliers is greatest when(a) supply is elastic and demand is inelastic .(b) supply is inelastic and demand is inelastic.(c) supply is elastic and demand is elastic.(d) supply is inelastic and demand is elastic.
Effect of Sales Tax Price (S per pack) 1.50 1.40 1.30 1.25 1.15 Quantity (Millions of pack) 3 4 5
1. Consider a market where the supply is given by QS = P and the demand is given by QD=20-P. (a) Suppose the government wants to raise 18¥ by imposing per unit tax on this market. What tax rate will raise the required revenue and also mini- mize the dead weight loss? (b) What is the resulting equilibrium and the dead weight loss? What is the incidence of taxation? (c) Can you think of a method for raising 18Y from this market that will (1) incur no dead weight loss and (2) be preferable to the per unit tax for both the producers and the consumers.
50 Price (P) S2 (after tax) S; (before tax) Tax i of $35 $30 $25 $20 E 90 100 Quantity (Q) The diagram above shows a market before and after an excise tax has been levied by the government. The diagram indicates the effective price (net of tax) that sellers receive after the tax is: Select one: а. $35 b. $20 c. $25 d. $30
$12 10 4500 5000 Quantity Consider the impact of a tax on sellers, shown in this diagram of the market for whiskey. In this case, the buyers' total share is and the sellers' total share is $500; $500 $6750; $6750 $9000; $450O None of the above are correct.