Taxes
... Who really pays these taxes? Income tax and the Social Security tax are deducted from your pay, and state sales tax is added to the price of the things you buy, so isn’t it obvious that you pay these taxes? Isn’t it equally obvious that your employer pays the employer’s contribution to the Social Se ...
... Who really pays these taxes? Income tax and the Social Security tax are deducted from your pay, and state sales tax is added to the price of the things you buy, so isn’t it obvious that you pay these taxes? Isn’t it equally obvious that your employer pays the employer’s contribution to the Social Se ...
Document
... therefore less price-elastic than meals at fancy restaurants. So, a tax on restaurant meals would cause a larger DWL than a tax on groceries. ...
... therefore less price-elastic than meals at fancy restaurants. So, a tax on restaurant meals would cause a larger DWL than a tax on groceries. ...
econ.boun.edu.tr
... therefore less price-elastic than meals at fancy restaurants. So, a tax on restaurant meals would cause a larger DWL than a tax on groceries. ...
... therefore less price-elastic than meals at fancy restaurants. So, a tax on restaurant meals would cause a larger DWL than a tax on groceries. ...
Econ 202 Exam 2 Practice Problems
... ____ 17. In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. As a ...
... ____ 17. In the market for widgets, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for widgets is 200 per month when there is no tax. Then a tax of $5 per widget is imposed. As a ...
Spring 2000, Exam 2.doc
... 14. Competitive markets are those in which the profits of consumers and sellers depend only on trades they make themselves. In such markets, competitive equilibrium is efficient because a. total profits (sum of consumers’ surpluses and sellers’ profits) are at least as large as they would be with an ...
... 14. Competitive markets are those in which the profits of consumers and sellers depend only on trades they make themselves. In such markets, competitive equilibrium is efficient because a. total profits (sum of consumers’ surpluses and sellers’ profits) are at least as large as they would be with an ...
Answers to Practice Questions and Problems 1
... a. A woman works 10 hours a week in her family owned restaurant. Not in labor force since she is not working enough to be considered employed (at least 20 hours a week in a family-owned business) nor is she unemployed since she is not actively seeking a job. b. A 13 year old babysits every afternoon ...
... a. A woman works 10 hours a week in her family owned restaurant. Not in labor force since she is not working enough to be considered employed (at least 20 hours a week in a family-owned business) nor is she unemployed since she is not actively seeking a job. b. A 13 year old babysits every afternoon ...
PUBLIC ECONOMICS
... tax revenue raised: tax revenues are greater the lower are the elasticities. Vice versa, the greater are the elasticites, the lower the tax revenue, because of the greater reduction in the quantity traded. ...
... tax revenue raised: tax revenues are greater the lower are the elasticities. Vice versa, the greater are the elasticites, the lower the tax revenue, because of the greater reduction in the quantity traded. ...
Slide 1
... To allocate resources efficiently and maximize total surplus, the planner would need to know every seller’s cost and every buyer’s WTP for every good in the entire economy. ...
... To allocate resources efficiently and maximize total surplus, the planner would need to know every seller’s cost and every buyer’s WTP for every good in the entire economy. ...
Tax Incidence and the Efficiency Cost of Taxation
... The Excess Burden Marginal Excess Burden := The excess burden of an extra £ raised in taxes. (This is generally higher than the average burden, as should tax least distorting commodities first.) • A good tax system should impose taxes with least excess ...
... The Excess Burden Marginal Excess Burden := The excess burden of an extra £ raised in taxes. (This is generally higher than the average burden, as should tax least distorting commodities first.) • A good tax system should impose taxes with least excess ...
Taxation and Government Intervention
... want crop subsidies or price supports. – If renters have it, they want rent controls. ...
... want crop subsidies or price supports. – If renters have it, they want rent controls. ...
Midterm Two from the Morning Lecture
... Refer to the following information for the next THREE questions. Ivan has decided to start a new business producing homemade beer. During the first year of his business, Ivan sold 15000 cans of beer for $4/can. The technology of production Ivan is using has a constant average variable cost of $2/can ...
... Refer to the following information for the next THREE questions. Ivan has decided to start a new business producing homemade beer. During the first year of his business, Ivan sold 15000 cans of beer for $4/can. The technology of production Ivan is using has a constant average variable cost of $2/can ...
Excise taxes
... who value it the most, as indicated by the fact that they have the highest willingness to pay. 2. It allocates sales to the potential sellers who most value the right to sell the good, as indicated by the fact that they have the lowest cost. 3. It ensures that every consumer who makes a purchase val ...
... who value it the most, as indicated by the fact that they have the highest willingness to pay. 2. It allocates sales to the potential sellers who most value the right to sell the good, as indicated by the fact that they have the lowest cost. 3. It ensures that every consumer who makes a purchase val ...
Exam #1 - 2 October 1990
... a. Use the graph to illustrate how the $4-per-unit tax would affect the market equilibrium price and quantity sold. What would be the new market price after the tax? ________________ What would be the new quantity sold after the tax? ________________ b. Before the tax, sellers received $8 for ea ...
... a. Use the graph to illustrate how the $4-per-unit tax would affect the market equilibrium price and quantity sold. What would be the new market price after the tax? ________________ What would be the new quantity sold after the tax? ________________ b. Before the tax, sellers received $8 for ea ...
Problem Set 1 - uc
... Ans) This question is a really discussion type question because there is no clear cut answer. However, we can think about each of the taxes and apply our intuition. The Property tax of 1-3% does not seem to be that large (in fact, some leftist argue that it should be 5%), but its burden is not that ...
... Ans) This question is a really discussion type question because there is no clear cut answer. However, we can think about each of the taxes and apply our intuition. The Property tax of 1-3% does not seem to be that large (in fact, some leftist argue that it should be 5%), but its burden is not that ...
PS4s_w08 - uc
... Ans) This question is a really discussion type question because there is no clear cut answer. However, we can think about each of the taxes and apply our intuition. The Property tax of 1-3% does not seem to be that large (in fact, some leftist argue that it should be 5%), but its burden is not that ...
... Ans) This question is a really discussion type question because there is no clear cut answer. However, we can think about each of the taxes and apply our intuition. The Property tax of 1-3% does not seem to be that large (in fact, some leftist argue that it should be 5%), but its burden is not that ...
HWPS#2
... weekly local curb-side trash and recycling collection. You are asked for an economic analysis of the likely short-run and long-run effects of this action and to make a recommendation to the council. What would you recommend and why? There are several things you could consider and discuss in your ana ...
... weekly local curb-side trash and recycling collection. You are asked for an economic analysis of the likely short-run and long-run effects of this action and to make a recommendation to the council. What would you recommend and why? There are several things you could consider and discuss in your ana ...
Document
... many goods & services to raise revenue to pay for national defense, public schools, etc. • The government can make buyers or sellers pay the tax. • The tax can be a % of the good’s price, or a specific amount for each unit sold. • For simplicity, we analyze perunit taxes only. ...
... many goods & services to raise revenue to pay for national defense, public schools, etc. • The government can make buyers or sellers pay the tax. • The tax can be a % of the good’s price, or a specific amount for each unit sold. • For simplicity, we analyze perunit taxes only. ...
Chap015
... • At each consumption level of barley, the vertical distance between AD and AF shows tax payments in terms of forgone corn. • Normalize Pc=$1, so that vertical distance can be measured in either quantity of corn or dollars. ...
... • At each consumption level of barley, the vertical distance between AD and AF shows tax payments in terms of forgone corn. • Normalize Pc=$1, so that vertical distance can be measured in either quantity of corn or dollars. ...
answer key
... A) If the indifference curve is steep, the marginal rate of substitution is high. B) A low marginal rate of substitution implies a flat indifference curve. C) A flat indifference curve implies a consumer must receive a large amount of good X to compensate for a small decrease in good Y. D) A high ma ...
... A) If the indifference curve is steep, the marginal rate of substitution is high. B) A low marginal rate of substitution implies a flat indifference curve. C) A flat indifference curve implies a consumer must receive a large amount of good X to compensate for a small decrease in good Y. D) A high ma ...
Lecture 2 - Social Welfare and Policy Analysis
... • Producing the competitive quantity maximizes welfare. • Put another way, producing less than the competitive level of output lowers total welfare. • Deadweight Loss (DWL) is the name for the net reduction in welfare from the loss of surplus by one group that is not offset by a gain to another grou ...
... • Producing the competitive quantity maximizes welfare. • Put another way, producing less than the competitive level of output lowers total welfare. • Deadweight Loss (DWL) is the name for the net reduction in welfare from the loss of surplus by one group that is not offset by a gain to another grou ...
Market Failure - PowerPoint Presentation
... that are borne solely by the individuals involved in the transaction. An externality is a cost or benefit that accrues to someone who is not the buyer (demander) or the ...
... that are borne solely by the individuals involved in the transaction. An externality is a cost or benefit that accrues to someone who is not the buyer (demander) or the ...
Document
... units between QT and QE are not sold. The value of these units to buyers is greater than the cost of producing them, so the tax prevents some mutually beneficial trades. ...
... units between QT and QE are not sold. The value of these units to buyers is greater than the cost of producing them, so the tax prevents some mutually beneficial trades. ...
File - MCNEIL ECONOMICS
... externality is not zero from society’s perspective and there is a price to be paid. This condition means that society must consider the marginal benefit and marginal cost of reducing a negative externality. (1) The equilibrium occurs where the marginal cost to society from reducing the negative exte ...
... externality is not zero from society’s perspective and there is a price to be paid. This condition means that society must consider the marginal benefit and marginal cost of reducing a negative externality. (1) The equilibrium occurs where the marginal cost to society from reducing the negative exte ...
Pigovian tax
A Pigovian tax (also spelled Pigouvian tax) is a tax applied to a market activity that is generating negative externalities (costs for someone other than the person on whom the tax is imposed). The tax is intended to correct an inefficient market outcome, and does so by being set equal to the social cost of the negative externalities. In the presence of negative externalities, the social cost of a market activity is not covered by the private cost of the activity. In such a case, the market outcome is not efficient and may lead to over-consumption of the product. An often-cited example of such an externality is environmental pollution.In the presence of positive externalities, i.e., public benefits from a market activity, those who receive the benefit do not pay for it and the market may under-supply the product. Similar logic suggests the creation of a Pigovian subsidy to make the users pay for the extra benefit and spur more production. An example sometimes cited is a subsidy for provision of flu vaccine.Pigovian taxes are named after economist Arthur Pigou who also developed the concept of economic externalities. William Baumol was instrumental in framing Pigou's work in modern economics.