Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 32, Problem 3.4P
To determine
The elasticity of supply of labor.
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Students have asked these similar questions
In the United States, payroll taxes are essentially assessed evenly between workers and firms.
If the supply of labor is less elastic than the demand for labor, are workers or firms more likely to bear the additional burden of an increased payroll tax in the United States?
Could this burden be shifted to the firms by assessing the increase in payroll taxes on just firms rather than having firms and workers continue to be assessed payroll taxes equally?
Given the following information:
QD = 240 – 5P
QS = P
Where QD is the quantity demanded, Qs is the quantity supplied and P is the price
Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. Determine demand and supply equation after tax
Given the following information:
QD = 240 – 5P
QS = P
Where QD is the quantity demanded, Qs is the quantity supplied and P is the price
Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. Determine demand the buyer’s price after tax
Show that given a linear demand schedule and constant marginal cost, the excise tax will lead to a decrease in the level of output while increasing the price by half of the tax rate.
Chapter 32 Solutions
Principles of Economics (12th Edition)
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- In the market for a good, the aggregate demand and supply are summarized by the following expressions: Qd (p) = 20−p & Qs (p) = 2p−4 Assume the government charges a per-unit tax of τ dollars on each unit of the good purchased by the consumers. If the resulting equilibrium quantity is 8 units of the good, what must be the value of the tax?arrow_forwardQuestion 8 Consider the following supply and demand functions in a market: p=12-2Q p=2Q Suppose the government imposes a tax rate t*=4 on demand. Compute the total economic tax burden (incidence) on producers (after tax t* is imposed). (Enter your answer to one integer. For "8", you would write 8).arrow_forwardGiven the following information: QD = 240 – 5P QS = P Where QD is the quantity demanded, Qs is the quantity supplied and P is the price Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. Determine demand the seller’s price after tax. Given the following information: QD = 240 – 5P QS = P Where QD is the quantity demanded, Qs is the quantity supplied and P is the price Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. Determine the quantity after taxarrow_forward
- When assessing the welfare effects of taxes, we can conclude that They are always welfare increasing, because they allow the government to provide essential goods They are usually welfare decreasing in the market in which they are raised, but for society as a whole it depends on how they are used They are always welfare decreasing They are welfare neutral, because whatever is lost by producers and consumers goes instead to the government and therefore is just a reallocation of moneyarrow_forwardgive an explanation to the following statements: The higher the elasticity of supply in the labor market, the closer would budgetary expenditure be as a proxy for the social cost of a project.arrow_forwardIn a country, a value-added tax (VAT) is applied at each stage of production. The nature of VAT allows for the ____________ of the tax burden along the supply chain, from producers to final consumers. A) Concentration B) Reduction C) Absorption D) Shiftingarrow_forward
- Given: Qd = 240 - 5P Qs = P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price. Suppose the government decides to impose a tax of $12.00 per unit on sellers in this market. A) What is the supply equation after tax? B) What is the demand equation after tax?arrow_forwardThe following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has Just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. Demand Supply 16, 18 21.00 18.00 15.00 QUANTITY (Pinckneys) Complete the following table, given the information presented on the graph. Result Value Per-unit tax $6.00 Equilbrium quantity before tax Price producers recelve before tax $18.00 In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept D. Deadweight loss after the tax is imposed Consumer surplus after the tax is imposed Producer surplus before the tax Is imposed PRICE (Dotars per pinckney) 口□□arrow_forwardAlgebraically, solve for the after tax equilibrium price and quantity in the corn market, if the government collects a specific tax of t=$2.40 from customers. The before-tax linear demand function for U.S. corn is given as Q=15.6-0.5p and the original supply curve is given as Q=9.6+0.25p. Please show with a diagram.arrow_forward
- How a tax burden is divided between consumers and producers is called tax incidence. Consumers bear most of the tax burden when: Group of answer choices Demand is more elastic than supply The firm decides to pass none of the tax on to the consumer via a higher price. Supply is more elastic than demand. Cross elasticity of demand is .35arrow_forwardParliament is interested in financing the cost of their proposed childcare programme by imposing a payroll tax on workers. Some members of parliament are worried that workers will pay the entire burden of this payroll tax and propose for this tax to be imposed on firms. Address the concerns of the members of the Parliament in your report (100 words)arrow_forwardThe following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.arrow_forward
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