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 5SP
To determine
Determine whether the given items are good candidates for an excise duty or not, and to minimize the
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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
How can the government improve tax collections without imposing much tax to the consumer?
d. How much government revenue will be generated by the excise tax?
Chapter 5 Solutions
EBK PRINCIPLES OF MICROECONOMICS (SECON
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Similar questions
- If the government increases alcohol taxation how will it affect consumption?arrow_forwardThe reason which determines the elasticity of tax burden on buyers and sellers.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 are the fundamental principles of taxation?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_forwardwhat the meaning of tax?arrow_forward
- How does a tax on a good affect the price paid by buyers, price receive by sellers, and the quantity sold?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
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