The government is thinking about increasing the gasoline tax to promote conservation. The tax will discourage the consumption of gasoline by the greatest extent when the price elasticity of demand equals Select one: a.1.3. b.2.0. c.0.1. d.0.7
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- 29. The government is thinking about increasing the gasoline tax to promote conservation. The tax will discourage the consumption of gasoline by the greatest extent when the price elasticity of demand equals Question 11Select one: a. 0.1. b. 1.3. c. 0.7. d. 2.0.8. Suppose we want regular cars to be gradually replaced by electric cars. There are several kinds of government interventions that could be used to make this happen, or at least to push the car market to produce and sell more electric cars. Explain how a tax could be used for this purpose, and then explain how a subsidy could be used for this purpose.6a. In a market where the supply curve is inelastic, how does an excise tax affect the price paid by consumers and the quantity exchanged?
- 3. The government of a small country needs to raise money to fund school improvements. It is considering implementing a tax on rice to raise money. (a) Using a supply and demand diagram, explain why the tax will cause a deadweight loss. (b) Rice is an important part of its citizens' diet and has a demand elasticity of –0.2. Cars are a luxury good and have a demand elasticity of –3. Assume both rice and cars are imported into the country so supply is perfectly elastic. Which tax will cause a greater deadweight loss? Explain why using economic arguments. Which good do you think the government should tax? Why? Your explanation can incorporate whatever reasons you think are important.6. Governor Gavin Newsom wants to raise money. He has a choice of imposing an excise tax of the same amount on one of two previously untaxed goods: restaurant meals or sales of gasoline. Both the demand and the supply of restaurant meds are more elastic than the demand for and the supply of gasoline. Do the following: a. Draw a diagram that illustrates the tax revenue and deadweight loss from taxation of restaurant meals b. Draw a diagram that illustrates the tax revenue and deadweight loss from taxation of [gasoline. If the goal was to maximize government tax revenue, which item should be taxed? |Why? c.1. The equilibrium price of juice was initially $1.80 per bottle, and the equilibrium quantity was 8,000 bottles per day. When the government imposed a tax of $0.50 per bottle, the price went up to $2.18 per bottle, and quantity fell by 12%. A) How much of the tax (in $/bottle) are the buyers paying? B) How much of the tax (in $/bottle) is shouldered by the sellers? C) After the tax is imposed, how many bottles will be consumed?
- EOC 9.01 If the government decides to increase the tax on gasoline from $0.10 to $0.12 per litre, what happens to the deadweight loss from this tax? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. It rises by more than 20%. a b It rises by less than 20%. It rises exactly 20%. Deadweight loss will not change.indicate whether you think the statement is true or false andexplain why. 9. Natural gas and coal are two fuels used for electricity generation and their cross-price elasticity is positive.10. A tax on gasoline will have a smaller deadweight loss if the demand for gas is inelasticthan if it is elastic.11. If the solar panel industry is competitive, the marginal firm makes zero profits in the longrun.12. The supply of goods depends on the vertical aggregation of individual demands.13. Applying dynamic efficiency to non-depletable renewable energy is not necessary becauseits quantity will not in the future.14. Given a competitive oil market and zero extraction cost, dynamic efficiency entails that thecurrent oil price equals the present discounted value of the future price.41. The Government decides that it is time to reduce air pollution by reducing the usage of gasoline. They impose a 1000 VND tax on each liter of gasoline sold. a.Should they impose this tax on producers or consumers? Explain carefully using a supply-and-demand diagram. b.If the demand for gasoline were more elastic, would this tax be more effective or less effective in reducing the quantity of gasoline consumed? Illustrate your answers with a diagram.
- Suppose that in Australia the price elasticity of steel demand of -1.5 and the price elasticity of steel supply is 1.2. If a tax of $50 per tonne of steel is applied, then: a. The tax burden on consumers will be greater than the tax burden on suppliers. b. The tax burden on suppliers will be greater than the tax burden on consumers. c. The tax burden on consumers will be equal to the tax burden on suppliers. d. The steel price is unlikely to be substantially affected.4. When the price of groundwater (water underground) increased from $1,525.5000 to $2,750.75000 per acre foot, the demand for pumps decreased from 575,950.7500 to 380,250.5000 units. a. Calculate the appropriate elasticity. b. Interpret the Elasticity c. How would you classify groundwater and pumps?7.04 Review Suppose a tax of $20 is placed on televisions. If this market's supply and demand curves' are elastic, the burden of this tax falls on: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a the sellers b the buyers both the sellers and the buyers.