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)....
Rank the following stakeholders in terms of who would have priority when a company is settling claims of the stakeholders against it. Note, a rank of 1 means this stakeholder should be paid first. ...
P(1.12 < z < 1.75) Find the indicated probability using the standard normal distribution. If convenient, use technology to find the probability.
Jennelle and Paula are equal partners in the J&P Manufacturing Partnership. The partnership will form J&P Corporation by exchanging the assets and liabilities of the J&P Manufacturing Partnership for...
A building is to be cooled in the summer season in a hot and dry region where the outdoor design conditions are 110 oF DB and 65 oF WB. The building sensible and latent heat gains are 300,000 Btu/h...
The accompanying diagram shows data from the U.S. Bureau of Labor Statistics on the average price of an airline ticket in the United States from 1975 until 1985, adjusted to eliminate the effect of...
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...
Example 6.1 used sum(wtlossdat ["B"] *wtlossdat["y"])/4 to compute the main effect of $\mathrm{C}$.a. Explain why the espression is divided by 4 ? b. Write an $\mathrm{R}$ function to calculate the...
What were the components of the American System and how were they designed to promote the nation economy? explain
Briefly explain the four dimensions of the Myers-Briggs Type Indicator. Explain how cognitive and social-learning theories explain your self-image Define collectivism and individualism and explain...
What are the social issues in the Philippines that belongs to Sociology?
How does the conflict theory ground the study of poverty? explain
Dora Inc. reported the following on the company's cash flow statement: Net cash flows from operating activities ___________$340,000 Net cash flows used for investing activities____________ (100,000)...
In Exercises 1140, find both first partial derivatives. z = Z = In x + y x - y
Planning: Creating an Audience Profile; Collaboration: Team Projects. Compare the Facebook pages of three companies in the same industry. Analyze the content on all available tabs. What can you...
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?
Implement the definition of the function rotate ToLeft(), member of the DArray class, so that it rotates all the elements of the array object to the left by one position. Example: [6, 2, 5, 3] [2, 5,...
Write the definition of the of the function is Full() as a member function of the DArray class. The function returns true if the array is full, or false otherwise. Functions.cpp 1 #include "DArray.h"...
Write a program that will calculate the trajectory of a golf ball thrown with a velocity of 25.6 m/s at an angle of 0 = 35 relative to the horizontal, from a hill that is 2.1 meters above the ground...

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