Suppose a tax is imposed on a good with a perfectly elastic supply curve. a. Who pays

Question:

Suppose a tax is imposed on a good with a perfectly elastic supply curve.
a. Who pays the tax?
b. Using demand and supply curves, show how much tax is collected.
c. How would this tax revenue change if the supply curve becomes less elastic?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Microeconomics A Contemporary Introduction

ISBN: 978-1111415921

9th edition

Authors: William A. McEachern

See More Books

Question Posted: Dec 12, 2015 05:20 AM

See More Questions

You know that if a tax is imposed on a particular product, the burden of the tax is shared by producers and consumers. You also know that the demand for automobiles is characterized by a stock...
Multiple Choice Questions: 1. Price elasticity of demand is said to be greater a. The shorter the period of time consumers have to adjust to price changes. b. The longer the period of time consumers...
Suppose demand and supply are given by a. Determine the equilibrium price and quantity. Show the equilibrium graphically.b. Suppose a $6 excise tax is imposed on the good. Determine the new...
Use the graph of f to solve Exercises 924. Where applicable, use interval notation. Find the x-intercept(s). y = f(x) # [TD y X
Megan owns 55% and Vern owns 45% of a business entity. The owners would like to use the entity to share profits (55% for Megan and 45% for Vern) and to share losses (80% for Vern and 20% for Megan)....
Identify which costing method is more likely to be used to accumulate costs for the following products or services by marking an "X" in the appropriate column. PRODUCT/SERVICE A completed tax return...
10-9. How do service businesses use off-peak pricing?
The assets and liabilities of Post Oak, Inc., as of December 31, 2012, and revenues and expenses for the year ended on that date follow. Beginning retained earnings was $114,000, and dividends...
On January 1 Alfa Corp. issues 1,000 no-par ordinary shares for 15 per share. The shares have a stated value of 5 per share. When Alfa prepares the journal entry to record the issuance of the shares...
Income statements for Burch Company for Year 3 and Year 4 follow. Required Round all percentages to one decimal point. a. Perform a horizontal analysis, showing the percentage change in each income...
The claim is often made that a tax on a specific good is simply passed on to consumers. Under what conditions of demand and supply elasticities does this occur? Under what conditions is little of the...
During the 1980s, the U.S. Congress imposed a high sales tax on yachts, figuring that the rich could afford to pay for this luxury. But so many jobs were lost in the boat-building industry that the...
As you discovered earlier, ordinal data are data about order or rank given on a scale such as 1, 2, 3, . . . or A, B, C, . . . . Most statisticians recommend using the median to indicate the center...
The composition of moist air is given on a molar basis to be 78 percent N2, 20 percent O2, and 2 percent water vapor. Determine the mass fractions of the constituents of air. Use the table containing...
1. Consider the LFSR with so = 1, 8 = 1, S2 = 1, 83 = 1, 84 = 0, and Sn Sn-2 Sn-3+ Sn-5. Find the next 15 terms in this LFSR. What is the period of this LFSR? 2. Suppose you learn that a Hill cipher...
Assume that you are thinking of a new acquisition campaign for SEDO, assuming that you want to convert people who are already engaged. Develop a big idea (in the communication) that you can use in...
You have a backend Amazon EC2 instance providing a web service to your web server instances. Your web servers are in a public subnet. You would like to block inbound requests from the internet to...
Consider the following task set. Task C T|D T1 20 50 40 T2 10 40 30 T3 5 20 15 a) Verify whether the task set is schedulable under DM using the processor utilization-based ap- proach. b) Verify...
Why are the characteristics of an issuer important in determining the price of a financial asset?
A simple random sample of 220 university students were asked what pasta they usually order and with which sauce. The preferences of these respondents are summarised below: Sauce Bolognese Pasta...
Unit Costs. Cheng Industries operates a plant in Kaohsiung, Taiwan, which manufactures table tennis paddles for export throughout the world. During December, Cheng produced 24,000 paddles. Costs...
Some economists believe that in order to really understand macroeconomics, you must first understand microeconomics. How does microeconomics relate to macroeconomics?
Determine whether each of the following statements is normative or positive: a. The U.S. unemployment rate was below 10.0 percent in 2010. b. The inflation rate in the United States is too high. c....
What good is economic theory if it cant predict the behavior of a specific individual?
The following are the information of Chun Equipment Company for Year 2 . ( Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated. ) Salaries...
Alta Ski Company's inventory records contained the following information regarding its latest ski model. The company uses a periodic inventory system. Beginning inventory, January 1, 2018 1,250 units...
Fibertech GmbH is a distributor of outdoors technical clothing. The company outsources the production of clothing to external manufacturers in Bangladesh and sells the clothing under its own brands....

Suppose a tax is imposed on a good with a perfectly elastic supply curve. a. Who pays

Question:

Step by Step Answer:

a If supply is truly perfectly elastic horizontal line then the imp...View the full answer

Microeconomics A Contemporary Introduction

Students also viewed these Economics questions