Question

Consider a proposal to raise the tax on gasoline by 10 cents per gallon. If motorists...

Consider a proposal to raise the tax on gasoline by 10 cents per gallon. If motorists are currently consuming 150 million gallons of gasoline per year, will $15 million in additional tax revenues result? Why or why not? Use a diagram to enhance your explanation if needed.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose the federal tax on gasoline increased by 5 cents per gallon. Do you think that...
Suppose the federal tax on gasoline increased by 5 cents per gallon. Do you think that such an increase, reflected in the price of gasoline, would have a significant impact on gasoline consumption?
Government made proposal to increase the tax on gasoline by 50¢ per gallon. The government would...
Government made proposal to increase the tax on gasoline by 50¢ per gallon. The government would give poor consumers an amount of cash large enough that they could buy their original bundle (of gasoline and other goods). 1. Show how a typical poor person's budget line changes as a result of the tax and the subsidy. 2. Use a graph to show how the tax and subsidy could affect this person's optimal bundle. 3. Is this individual better or worse...
Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per...
Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per gallon. What happens when government imposes a tax of 60 cents per gallon on sellers? How would such a tax affect the market for gasoline i.e. what is the new equilibrium? The ne On whom does the incidence of the tax fall more heavily? How much government revenue will be generated by the excise tax? What happens when government imposes a tax of 60...
Data on the gasoline tax per gallon (in cents) as of a certain date for the...
Data on the gasoline tax per gallon (in cents) as of a certain date for the 50 U.S. states and the District of Columbia are shown below. State Gasoline Tax per Gallon State Gasoline Tax per Gallon Alabama 20.2 Missouri 17.5 Alaska 8.0 Montana 27.1 Arizona 19.0 Nebraska 27.6 Arkansas 21.1 Nevada 33.4 California 48.9 New Hampshire 19.9 Colorado 22.0 New Jersey 14.8 Connecticut 42.9 New Mexico 18.1 Delaware 23.0 New York 44.2 District of    Columbia 23.8 North Carolina 30.3...
You are an economic advisor to the treasurer of the United States. Congress is considering increasing...
You are an economic advisor to the treasurer of the United States. Congress is considering increasing the sales tax on gasoline by $.03 per gallon. Last year motorists purchased 10 million gallons of gas per month. The demand curve is such that every $.01 increase in price decreases sales by 100,000 gallons per month. You also know that for every $.01 increase in price, producers are willing to provide 50,000 more gallons of gasoline to the market. The legislature has...
In a presidential campaign, a candidate proposes a 50 cent per gallon tax on gasoline. The...
In a presidential campaign, a candidate proposes a 50 cent per gallon tax on gasoline. The idea of a gasoline tax is both to raise government revenue and to reduce oil consumption and the country’s dependence on oil imports. The Demand and supply functions are given by Qd=150-50P and Qs=60+40P respectively. If the candidate is voted into power and the policy is adopted: Calculate the equilibrium quantity and price before tax.(1 mark) What will be the equilibrium quantity and price...
Consider the following two taxes: 1) a state imposes a 10 cent tax on every gallon...
Consider the following two taxes: 1) a state imposes a 10 cent tax on every gallon of gasoline sold in the state to pay for road maintenance and improvements, and 2) a state imposes an additional 1% income tax on all state residents to pay for the construction of 50 new soccer fields throughout the state. Which of these two taxes is more consistent with the benefits-received principle? Why?
Cigarettes in Australia have long been subject to excise tax – a per cigarette tax levied...
Cigarettes in Australia have long been subject to excise tax – a per cigarette tax levied on the suppliers of cigarettes. (The tax applies to all tobacco products, however for the purposes of this exam assume cigarette and tobacco consumption are the same thing). In 2016 the federal government announced that the excise tax rate for cigarettes would rise by 12.5% a year for the next 4 years. Over this period tax revenue collected from the sale of cigarettes has...
Chapter 6 13. Consider the following bonds: Bond Coupon Rate (annual payments) Maturity (years) A 0%...
Chapter 6 13. Consider the following bonds: Bond Coupon Rate (annual payments) Maturity (years) A 0% 15 B 0% 10 C 4% 15 D 8% 10 What is the percentage change in the price of each bond if its yield to maturity falls from 6% to 5%? Which of the bonds A–D is most sensitive to a 1% drop in interest rates from 6% to 5% and why? Which bond is least sensitive? Provide an intuitive explanation for your answer....
Please review the following below and provide , one-page reaction to this budget proposal. 1. Budget...
Please review the following below and provide , one-page reaction to this budget proposal. 1. Budget The President’s Budget and Health Care While the president’s budget is not likely to be acted upon by Congress, it does signal what the administration’s priorities are—as well as what policy initiatives they might push. Repeal the Affordable Care Act: The administration’s budget includes a plan that is based upon the plan put forward by Sens. Lindsey Graham (R-SC) and Bill Cassidy (R-LA) last...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT