Calculate the percentage of the tax borne by the demander and supplier in each of the following cases:Instructions: Enter your responses rounded to the nearest whole number. Elasticityof demandElasticityof supplyPercent borne by demanderPercent borne by suppliera.ED = 0.1ES = 0.5 % %b.ED = 1.0ES = 2.0 % %c.ED = 1.3ES = 0.9 % %d.ED = 1.9ES = 0.7 % % e. Summarize your findings regarding relative elasticity and tax burden.Consumers bear a greater portion of the tax burden because consumers choose to buy the good.Whichever group (producers or consumers) has the lower elasticity bears the greater portion of the tax burden.Whichever group (producers or consumers) has the higher elasticity bears the greater portion of the tax burden.Producers usually bear a greater portion of the tax burden because the government generally levies more taxes on producers.

The fraction of tax borne by the demanded = ES/(ED+ES) Similarly, for supplier = ED/(ED+ES) A) ED =…

Answered: Calculate the percentage of the tax…

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Costs Of Taxation

Section: Chapter Questions

Problem 1CQQ

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Calculate the percentage of the tax borne by the demander and supplier in each of the following cases:

Instructions: Enter your responses rounded to the nearest whole number.

	Elasticity of demand	Elasticity of supply	Percent borne by demander	Percent borne by supplier
a.	E_D = 0.1	E_S = 0.5	%	%
b.	E_D = 1.0	E_S = 2.0	%	%
c.	E_D = 1.3	E_S = 0.9	%	%
d.	E_D = 1.9	E_S = 0.7	%	%

e. Summarize your findings regarding relative elasticity and tax burden.

Consumers bear a greater portion of the tax burden because consumers choose to buy the good.
Whichever group (producers or consumers) has the lower elasticity bears the greater portion of the tax burden.
Whichever group (producers or consumers) has the higher elasticity bears the greater portion of the tax burden.
Producers usually bear a greater portion of the tax burden because the government generally levies more taxes on producers.

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