Homework Answers
If demand is perfectly inelastic and supply is relatively elastic the burden of an excise tax falls entirely on consumers.
If supply is more inelastic than demand then seller bear the tax burden
If demand is inelastic then quantity demanded for a good does not change in response to change in price so consumers have tax burden.
So option D is the correct statement
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Question 23 1 pts If demand is perfectly inelastic and supply is relatively elastic, the burden...
suppose a tax is imposed on a good that has relatively inelastic demand and relatively elastic...
suppose a tax is imposed on a good that has relatively inelastic demand and relatively elastic supply. who will bear more of the burden tax, consumers or producers? Explain.
Suppose the supply of a good is perfectly elastic while the demand is elastic. The burden...
Suppose the supply of a good is perfectly elastic while the demand is elastic. The burden of a tax on the drug will A) be shared by the buyers and sellers. B) fall entirely on the sellers. C) fall entirely on the buyers D) fall on neither the buyers nor the sellers.
3. Consider a perfectly inelastic supply curve at q = 1,013, and a perfectly elastic demand...
3. Consider a perfectly inelastic supply curve at q = 1,013, and a perfectly elastic demand curve at p = 101. A subsidy of $5 per unit is given to producers. Using a diagram, explain how the subsidy is shared between consumers and producers. What is the Deadweight Loss? (30%)
substitutes. DQuestion 46 2 pts If a tax is imposed on a good with equally elastic...
substitutes. DQuestion 46 2 pts If a tax is imposed on a good with equally elastic supply and demand, the burden of the tax will be borne O by producers alone. y by producers but partially by consumers O mostly by consumers but partially by producers. O by consumers alone. O by consumers and producers equally. D Question 47 2 pts When demand is perfectly elastic, the demand curve is
Question 5 1 pts Assuming that a $500 excise tax is imposed in a market. The...
Question 5 1 pts Assuming that a $500 excise tax is imposed in a market. The consumer share of the actual tax incidence turns out to be $100, while the producers' share of the tax burden turns out to be $400. O This implies that supply is relatively more elastic than demand This implies that demand is relatively more elastic than supply O Tax Burden and elasticity are unrelated concepts.
QUESTION 5 If demand is more elastic and supply is less elastic, then the burden of...
QUESTION 5 If demand is more elastic and supply is less elastic, then the burden of a tax would fall heavily on consumers. o True False
2. When the price elasticity of demand is low and the price elasticity of supply is...
2. When the price elasticity of demand is low and the price elasticity of supply is high, the burden of an excise tax falls primarily on: Consumers Producers None of the above Equally divided
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement...
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic...
1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic demand and elastic supply b) Elastic demand and inelastic supply c) Relative elasticities of demand and supply are similar In each diagram, clearly label: equilibrium price before the tax. price paid by buyers after the tax, price received by sellers after the tax, portion of tax burden on consumers, and portion of tax burden on producers. 2. What happens to the amount of deadweight...
Suppose that the demand for apples is perfectly elastic and the government levies a tax on...
Suppose that the demand for apples is perfectly elastic and the government levies a tax on the producers of apples. Assume that the supply of apples is neither perfectly elastic nor perfectly inelastic. 1. How will the price paid by consumers change? Is this change bigger or smaller than the price change that would result if the demand for apples were not perfectly elastic? 2. How will the quantity of apples consumed change because of the tax? Is this change...
3. Consider a perfectly inelastic supply curve at q = 1,013, and a perfectly elastic demand curve at p = 101. A subsidy of $5 per unit is given to producers. Using a diagram, explain how the subsidy is shared between consumers and producers. What is the Deadweight Loss? (30%)
substitutes. DQuestion 46 2 pts If a tax is imposed on a good with equally elastic supply and demand, the burden of the tax will be borne O by producers alone. y by producers but partially by consumers O mostly by consumers but partially by producers. O by consumers alone. O by consumers and producers equally. D Question 47 2 pts When demand is perfectly elastic, the demand curve is
Question 5 1 pts Assuming that a $500 excise tax is imposed in a market. The consumer share of the actual tax incidence turns out to be $100, while the producers' share of the tax burden turns out to be $400. O This implies that supply is relatively more elastic than demand This implies that demand is relatively more elastic than supply O Tax Burden and elasticity are unrelated concepts.
QUESTION 5 If demand is more elastic and supply is less elastic, then the burden of a tax would fall heavily on consumers. o True False
The perfectly competitive firm's demand curve is: Perfectly elastic. Relatively elastic Perfectly inelastic. Relatively inelastic Statement 1: In the long run, firms in a monopolistically competitive industry will be producing that quantity that maximize social surplus. Statement 2: In the long run, firms in a monopolistically competitive industry will be producing at the minimum of its ATC curve. Statement (1) is true; statement (2) is false. Statements (1) and (2) are both true. Statement (1) is false; statement (2) is...
1. Draw how the burden of the tax is distributed under the following scenarios: a) Inelastic demand and elastic supply b) Elastic demand and inelastic supply c) Relative elasticities of demand and supply are similar In each diagram, clearly label: equilibrium price before the tax. price paid by buyers after the tax, price received by sellers after the tax, portion of tax burden on consumers, and portion of tax burden on producers. 2. What happens to the amount of deadweight...
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