1.

Use the following information for the questions 6 and 7 (Hint: use equation in Sidebar 10-4): R=t(Se-0)+t(Sm-Se)+t(Sw-Sm)+t(Sr-Sw)

Assume that the production chain for an economy is characterized by the following transactions: Business Purchases Sales

Mine (Extractor): Purchases $ 0, Sales $ 200 Steel Mill (manufacturer): Purchases $ 200, Sales $ 1,000 Car Maker (wholesaler): Purchases $ 1,000, Sales $ 5,000 Car Dealer (retailer): Purchases $ 5,000, Sales $11,000 Assume further that the only transaction where a non-business is involved is in the sales of cars from car dealers to individuals.

Question: If the mine is subject to a 10 percent value-added tax (VAT), how much would it pay in taxes?

2.

Use the following information for the questions 6 and 7 (Hint: use equation in Sidebar 10-4): R=t(Se-0)+t(Sm-Se)+t(Sw-Sm)+t(Sr-Sw)

Assume that the production chain for an economy is characterized by the following transactions: Business Purchases Sales

Mine (Extractor): Purchases $ 0, Sales $ 200 Steel Mill (manufacturer): Purchases $ 200, Sales $ 1,000 Car Maker (wholesaler): Purchases $ 1,000, Sales $ 5,000 Car Dealer (retailer): Purchases $ 5,000, Sales $11,000 Assume further that the only transaction where a non-business is involved is in the sales of cars from car dealers to individuals.

Question: If the car dealer is subject to a 10 percent VAT, how much would it pay in taxes?