EBK PRINCIPLES OF MICROECONOMICS (SECON
2nd Edition
ISBN: 9780393616149
Author: Mateer
Publisher: W.W.NORTON+CO. (CC)
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Question
Chapter 5, Problem 4SP
To determine
Determine whether the given items are good candidates for an excise duty or not.
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If the government wants to raise tax revenue, which of the following items are good candidates for an excise tax?
Choose one or more: A. toilet paper B. automobile tires C. cigarettes D. sweet potatoes
Why does the government ass excise taxes to certain products?
The reason which determines the elasticity of tax burden on buyers and sellers.
Chapter 5 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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- In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?arrow_forwardHow can the government improve tax collections without imposing much tax to the consumer?arrow_forwardSuppose 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.arrow_forward
- Why is gasoline heavily taxed? Explainarrow_forwardWhat are pros and cons to increasing the gasoline tax?arrow_forwardWhy type of good are the best choice for levying or applying an excise tax? A. Goods that are considered “luxury goods” (boats, fragrances, designer-label clothing) B. Goods that are relatively inexpensive C. Good with very few substitutes (I.e., tobacco, alcohol, pharmaceuticals) D. Goods that represent a large share of consumer income in their purchase. E. Good that have many substitutes available.arrow_forward
- How does a tax on a good affect the price paid by buyers, price receive by sellers, and the quantity sold?arrow_forwardWhat will the federal government do to taxes?arrow_forwardThe government is considering imposing an excise tax on the following set of items. If the government wants to minimize the deadweight loss (DWL) of taxation, which of the following items are good candidates for an excise tax Choose one or more: A. Tangerines B. Gasoline C. Salt D. Ford trucksarrow_forward
- what the meaning of tax?arrow_forwardHow much of the tax per cell phone is paid by producers and how much is paid by consumers?arrow_forwardPrice Pa Pb ££ Pc Qt Q* Supply Demand Quantity The government imposes an excise tax on the market, what is the size of the tax? A) Pa-Pb B) Pa-Pc C) Pb-Pc D) Pbarrow_forward
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