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Illustrate, with the use of an appropriate figure, what the
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- Suppose the price elasticity of demand for smartphones is 0.5 (absolute value), while the price elasticity of supply is 1.9. If the government imposes a per-unit tax of $100 on the sellers of smartphones, how will the price and quantity transacted of smartphones change? Will the sellers or the buyers bear a larger tax burden? Will the market be able to achieve economic efficiency after the tax is imposed? Explain with a diagram.At the current market equilibrium, the price elasticity of demand for a certain good is much higher than the price elasticity of supply. If the government imposes a $2 specific tax on this good, who will bear more of the burden of the tax? Illustrate.How would I calculate a dead weight loss for a tax of $3 using this graph?
- If a tax of 75¢ a cup is introduced, what is the price of a cup of coffee and how much coffee is bought? Who pays the tax?With the help of appropriate diagrams, explain how a tax can be used to reduce the consumption of a harmful product such as cigarettes.Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 on the cigarette sellers. By how much would buyers share the tax burden respectively? Show your calculation.
- How a tax burden is divided between consumers and producers is called tax incidence. Consumers bear most of the tax burden when:If a tax of $1.20 is imposed on consumers in this market, what is the tax revenue?Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 Some economists believe that a sales tax, in general, is undesirable. Explain. Despite this, why do most countries still impose a tax on cigarette? Explain plausible arguments.
- The article does not mention the costs involved with the imposition of a sugary tax. Illustrate, with the use of an appropriate figure, what the deadweight loss from the imposition of a sugary tax would look like. Particularly, who would likely suffer a greater share of the deadweight loss – the consumer or producer? Why?The demand for salt is price inelastic and the supply of salt is price elastic. The demand for caviar is price elastic and the supply of caviar is price inelastic. Suppose that a tax of $1 per kilogram is levied on the sellers of salt and a tax of $1 per kilogram is levied on the buyers of caviar. Who would we expect to have to pay most of these taxes? Question 29Answer a. the sellers of salt and the sellers of caviar b. the buyers of salt and the buyers of caviar c. the sellers of salt and the buyers of caviar d. the buyers of salt and the sellers of caviarIf the government removes a tax on a good, then the quantity of the good sold will______.