Macroeconomics (7th Edition)
7th Edition
ISBN: 9780134738314
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 4, Problem 4.4.8PA
To determine
The impact of tax on pizza.
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Q.4.1 Read the excerpt in the textbox and use the information to answer the question
below:
http://clipart-library.com/citrus-cliparts.html
Adapted from the Farmer's Weekly. Written by Siyanda Sishuba
A strong increase in global demand for citrus has so far been
evident in the 2020 export season, according to Justin Chadwick,
CEO of the Citrus Growers' Association of Southern Africa.
In a statement, Chadwick said increased global demand for lemons
had resulted in 4,5 million 15kg-equivalent cartons being shipped to
date. This was double the 1,8 million cartons exported during the
same period in 2019.
https://www.farmersweekly.co.za/agri-news/south-africa/strong-demand-for-sa-
citrus-at-start-of-2020-export-season/[Accessed 19 March 2021].
With reference to the excerpt above, and assuming that the majority of the
sales of citrus are going to Europe, explain the impact this increase in the
demand for citrus fruit will have on the rand/euro exchange rate and the value
of the rand.
Use a…
Economics
Use the following information
$6.00
Sell 6 million razors
Variable cost = $3.00
Price elasticity = -3
Linear demand curve
Price for a razor =
Now, suppose the cost to produce a blade is $0.25. if you charge $0.35 for a
blade, a customer buys an average of 100 blades from you. A profit per blade is
$0.10. Assume the price elasticity of demand for blades is -3.
What price should you charge for a razor and for a blade? Choose the nearest
answer choice. (note: blade profit = razor demand x profit per blade x blade
demand)
%3D
In 2020 the UK government introduced a sales tax on all products bought online from overseas. Please note this is not a tariff – it is a tax. The tax will be 2% of the value of the products sold in the UK. This tax is collected from online sellers such as Amazon or ebay. Source: BBC (2019). See link: https://www.bbc.com/news/business-50656106
Consider the market for online products. The initial market equilibrium is at 10 million products sold per year at an average price of $500 each. Then, the UK government imposes a tax on the market, collected from sellers (for example Amazon and ebay). The tax is 2% per item (each item has an average price of $500).
Show the effect of this on the market for online products. Show the effect on consumers of online products, on the online sellers and on the government. Does the UK economy gain or lose as a result of the tax? Explain why. Use a diagram to support your answer.
Chapter 4 Solutions
Macroeconomics (7th Edition)
Ch. 4.A - Prob. 1RQCh. 4.A - Prob. 2RQCh. 4.A - Prob. 3RQCh. 4.A - Why would economists use the term deadweight loss...Ch. 4.A - Prob. 5PACh. 4.A - Prob. 6PACh. 4.A - Prob. 7PACh. 4.A - Prob. 8PACh. 4.A - Prob. 9PACh. 4 - Prob. 1TC
Ch. 4 - Prob. 2TCCh. 4 - Prob. 4.1.1RQCh. 4 - Prob. 4.1.2RQCh. 4 - Prob. 4.1.3RQCh. 4 - Prob. 4.1.4RQCh. 4 - Prob. 4.1.5PACh. 4 - Prob. 4.1.6PACh. 4 - Prob. 4.1.7PACh. 4 - Prob. 4.1.8PACh. 4 - Prob. 4.1.9PACh. 4 - Prob. 4.1.10PACh. 4 - Prob. 4.1.11PACh. 4 - Prob. 4.1.12PACh. 4 - Prob. 4.1.13PACh. 4 - Prob. 4.1.14PACh. 4 - Prob. 4.2.1RQCh. 4 - What is economic efficiency? Why do economists...Ch. 4 - Prob. 4.2.3PACh. 4 - Prob. 4.2.4PACh. 4 - Prob. 4.2.5PACh. 4 - Prob. 4.2.6PACh. 4 - Prob. 4.2.7PACh. 4 - Prob. 4.2.8PACh. 4 - Prob. 4.2.9PACh. 4 - Prob. 4.2.10PACh. 4 - Prob. 4.3.1RQCh. 4 - Prob. 4.3.2RQCh. 4 - Prob. 4.3.3RQCh. 4 - Prob. 4.3.4RQCh. 4 - Prob. 4.3.5PACh. 4 - Prob. 4.3.6PACh. 4 - Prob. 4.3.7PACh. 4 - Prob. 4.3.8PACh. 4 - Prob. 4.3.9PACh. 4 - Prob. 4.3.10PACh. 4 - Prob. 4.3.11PACh. 4 - Prob. 4.3.12PACh. 4 - Prob. 4.3.13PACh. 4 - Prob. 4.3.14PACh. 4 - Prob. 4.3.15PACh. 4 - Prob. 4.3.16PACh. 4 - Prob. 4.3.17PACh. 4 - Prob. 4.3.18PACh. 4 - Prob. 4.3.19PACh. 4 - Prob. 4.4.1RQCh. 4 - Prob. 4.4.2RQCh. 4 - Prob. 4.4.3RQCh. 4 - Prob. 4.4.4RQCh. 4 - Prob. 4.4.5PACh. 4 - Prob. 4.4.6PACh. 4 - Prob. 4.4.7PACh. 4 - Prob. 4.4.8PACh. 4 - Prob. 4.4.9PACh. 4 - Prob. 4.4.10PACh. 4 - Prob. 4.2CTE
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- I recently stumbled upon the following quote in a newspaper: "Increased production (i.e. an increase in supply) leads to a lower price; which in turn, increases demand." Do you agree with such reasoning? Briefly explain.arrow_forwardIn 2016, Walmart closed 150 stores in the United States and deeply discounted the merchandise in them. Some people bought the merchandise at these low prices and resold it on Amazon, eBay, and other sites. An article in the Wall Street Journal described one reseller who: "sent three employees in a 26-foot truck to the nearest closing Walmart, about 160 miles south. They hauled off $35,000 in merchandise, like Legos and Star Wars pajamas, which he said he expects to sell for as much as $100,000 on Amazon." Source: Greg Bensinger, "Wal-Mart Closures Bring Out the Amazon Sellers," Wall Street Joumal, January 29, 2016. Is the reseller making a $65,000 profit on these goods? Briefly explain. OA. Yes, the seller is making a $65,000 profit because his revenue is $ 100,000 and his cost is $35,000. B. No, the seller is making less than $65,000 because he incurs transactions costs. c. Yes, the seller is actually earning a $100,000 profit because the $35,000 is a sunk cost. D. No, the seller is…arrow_forwardWhy does the demand curve slope downward? Briefly explain.arrow_forward
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