Question

67. Suppose demand for electricity is inelastic, but not perfectly. A sales tax is imposed, and the tax is levied on buyers. Draw a graph to show the effects of the tax. Indicate CS, PS, tax revenue and DWL after tax on your graph.

68. Suppose supply is perfectly inelastic and demand is relatively elastic. Who bear all the tax burden, buyers or sellers? Explain in details.

Answer #1

2. Suppose supply is perfectly inelastic and demand is
relatively elastic. Who bear all the tax burden, buyers or sellers?
Explain in details.
3. Suppose demand for electricity is inelastic, but not
perfectly. A sales tax is imposed, and the tax is levied on buyers.
Draw a graph to show the effects of the tax. Indicate CS, PS, tax
revenue and DWL after tax on your graph.

Suppose the elasticity of demand for medicine is very inelastic
and the elasticity of supply for medicine equals 1. A tax on the
sale of medicine will:
burden sellers and buyers relatively equally
burden sellers and their workers more than consumers
burden consumers more than sellers and their workers
not burden consumers or sellers and their workers

Suppose price elasticity of demand is relatively inelastic for
good X. If the price elasticity of supply for good X is elastic and
an excise tax is imposed on good X, who will bear the greater
burden of the tax?
A. producers
B. both consumers and producers equally
C. government
D. consumers

4.
If Supply and Demand have the normal shapes (not perfectly
elastic or inelastic), a "tax on sellers" (as defined by Mankiw)
will shift demand upward by less than the amount of the tax, and
equlibrium posted price will increase by the same amound as the
tax.
True or False?
6.
If Supply and Demand have the normal shapes (not perfectly
elastic or inelastic), a "tax on sellers" (as defined by Mankiw)
will shift demand upward by the amount of...

10. The relationship between the price elasticity of
demand/supply curves and the tax burden for buyers/sellers. Suppose
buyers are more elastic than sellers. Who is going to bear more tax
burden?

How would the supply and or demand curve shift if a $4 tax was
imposed on suppliers for each unit of caviar and regular eggs sold?
With visuals please explain how the tax incidence, DWL, and welfare
effects differ between the two goods and why? please explain in
terms of CS, PS, DWL, revenue, elasticity, etc if possible. thank
you

Suppose the demand and supply curves for a large specialty
pizza are given by:
Qd = 120 – 10P
Qs = -30 + 5P.
Using the demand and supply functions above, the equilibrium
price of a pizza is ____, and the equilibrium quantity is ____.
Illustrate your answer.
Compute Price elasticity of demand and supply at this
equilibrium.
Compute CS and PS and illustrate on a graph.
Suppose that the government decrees that a specialty cannot be
sold above $8....

Which of the following sentences about tax incidence is true? I.
If demand is relatively elastic, producers will bear a greater
burden of the tax than consumers. II. If supply is completely
inelastic, producers will bear all the burden of the tax. III. If
the supply curve is completely elastic, consumers will bear none of
the burden of the tax. Group of answer choices II and III only. III
only I, II and III. II only. I and II only.

4A
The price elasticity along a negatively sloped linear demand
curve
1 changes at every point
2 is less than 1
3IS INFINITE
4 is equal to 1
5 is zero
28A
If demand curve is more elastic relative to supply
sellers pay a larger portion of the excise tax.
B.
consumer price increases by the amount of the tax.
C.
entire burden of the tax is borne by the sellers.
D.
sellers pay a smaller portion of the excise...

Suppose there is a market at its competitive equilibrium.
Demand p = 100 - QD
Supply p = 20 + (QS /3) The government introduces a subsidy of s
= $4 per unit of the good sold and bought.
(a) Draw the graph for the demand and supply before subsidy.
(b) What is the equilibrium price and quantity before the
subsidy and after the subsidy?
(c) Looking at the prices buyers pay and sellers receive after
the subsidy compared to...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 27 minutes ago

asked 35 minutes ago

asked 38 minutes ago

asked 38 minutes ago

asked 44 minutes ago

asked 49 minutes ago

asked 50 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago