Worried about excessive drinking among young people, the British government increased the tax on beer by 42% from 2008 to 2012. Does a specific tax substantially reduce the equilibrium quantity of alcohol? Answer in terms of the slopes of the demand and supply curves.
Answer to relevant QuestionsIf the government collects a $ 1 specific tax, what share of the tax is paid by consumers and firms in each of the following cases? Explain why. a. The demand curve is vertical at quantity Q and the supply curve is upward ...When Apple raised the price of iTunes from 99¢ to $ 1.29, GS Boyz’s “ Stanky Legg” sales dropped from 22,686 units to 19,692 units (Glenn Peoples, “ iTunes Price Change: Sales Down, Revenue Up in Week 1,” ...Using the coconut oil demand function from Question 1.9, calculate the income elasticity of demand for coconut oil. (If you do not have all the numbers necessary to calculate numerical answers, write your answers in terms of ...Using the data in Question 2.4, determine the standard error and t- statistic for the price coefficient. Is price statistically significantly different from zero at the 0.05 level of significance? Using Excel or another program, estimate the linear OLS demand regression for the iTunes focus group data in the Managerial Solution. What is the R2? What are the coefficient estimates, the standard errors, and the ...
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