Suppose that your state raises its sales taxfrom 5 percent to 6 percent. The state revenuecommissioner forecasts a 20 percent increase insales tax revenue. Is this plausible? Explain.

Q: Show the effect of this on the market for airline travel. Shov he effect on consumers of airline…

A: In the free market, the equilibrium price and quantity is determined by the forces of the demand and…

Q: 10) For optimal tax, which of the following rules are true? A) Broad base rule: Better to tax a wide…

A: Optimal taxation theory aims to find the tax system that will achieve the desired revenue and income…

Q: he demand and supply equations for a product are: Qd= 300 — 6P and Qs= -40 + 6P. Determine the…

A: a) Given: Qd = 300 - 6P Qs = -40 + 6P   At the equilibrium level, Qd = Qs 300-6P = -40+6P 340 = 12P…

Q: A challenger presidential candidate vows to cutentitlement spending by 20 percent in the first…

A: It is unlikely the candidate could achieve this reduction in entitlement spending by 20 percent.

Q: Explain how tax size and elasticity of demand/supply affect the size of tax revenue and social…

A: Elasticity of demand: It the measurement  of the percentage change in the quantity demanded of a…

Q: The demand for cigarettes, which create negativeexternalities through secondhand smoke, is…

A: The demand for inelastic goods changes slightly with response to the price changes because firstly…

Q: 3er the following hypothetical income tax brackets for a married couple Assume for simplicity there…

A: Income Tax Rate $0-$20,000 10% $20,000-$50,000 20 $50,000-$100,000 35 Over $100,000 50…

Q: b. Who pays more of the tax incidence? O Consumers and producers split the tax. O Producers, because…

A: The graph is showing demand and supply of tanning session when government imposes excise tax of $15…

Q: Eggs have a supply curve that is linear and upwardslopingand a demand curve that is linear…

A: Supply and demand is an economic model of value determination in a very market in economic science.…

Q: By using graphs, show and explain how an increase in tax rates can increase dead-weight loss…

A: The Laffer Curve theory was developed by the economist Arthur Laffer and it shows the relationship…

Q: If sellers bear more of the burden of taxation then O supply is more elastic than demand O…

A: Tax incidence refers to the distribution of tax burden between buyers and sellers. The burden of the…

Q: The market demand for rose is QD = 2400–60P and the market supply for rose is QS= –600 +40P.…

A: Demand shows the ability and willingness of a person to buy a good. Supply shows the willingness and…

Q: In the market for millet, the demand curve qd-50-3p and the supply curve is q=2p. the government…

A: The demand curve, Qd = 50 - 3P Supply curve, Qs = 2P Taxing to consumer = 5/3 Equate Qd = Qs50 - 3P…

Q: If tax is imposed on the buyers, ODemand shift left O Demand shift right O Supply shift left OSupply…

A: At the point when the tax is forced, the value that the purchaser addresses should surpass the cost…

Q: If GDPMP of a country is 50 billion and product taxes are 2 billion while subsidies given are worth…

A: The gross domestic product (GDP) is the money or market value of all the finished goods and services…

Q: Tax expenditures are: O a. expenditures made to collect taxes. b. losses in revenue due to tax…

A: Inflation has a profound affect on the economy, it reduces purchasing power of the consumer, affects…

Q: Distinguish between the benefits-received and the ability-to-pay principles of taxation. Which…

A: According to the benefit principle of taxation, those who receive the benefits from government…

Q: Suppose that the government has decided to place a $2 per litre tax on soft drinks. In this market,…

A: The economics as a study is based upon the idea and decision making where the resources are to be…

Q: Let Q=2P be supply and Q=20-2P be demand. With a tax of 2 the price received by the producer…

A: According to the given demand and supply should, initial market price was: Qs=Qd 2P=20-2P 4P=20 P=5…

Q: overnments use taxes to raise revenue. If governments increase the tax rate, is this uaranteed to…

A: Tax revenue is product of size of tax and the quantity sold at this taxed price.

Q: Calculate the percentage of the tax borne by the demander and supplier in each of the following…

A: The fraction of tax borne by the demanded = ES/(ED+ES) Similarly, for supplier = ED/(ED+ES) A) ED =…

Q: Excise taxes are popular sources of revenue for governments because O they require very little…

A: Excise tax is the tax levied on the production of a good. The burden of excise tax falls on both…

Q: In a supply and demand model, excise taxes on goods and services cause deadweight loss because: O…

A: A direct tax is one that is paid directly to the institution that imposed it. Individual taxpayers,…

Q: Now calculate the government's tax revenue if it sets a tax of $0, $20, $40, $50, $60, $80, or $100…

A: tax Q TR 0 60 0 20 48 960 40 36 1440 60 24 1440 80 12…

Q: 1. The following are issued by the Commissioner of Internal Revenue, except: a. Revenue Memorandum…

A: 1. a. Revenue Memorandum circulars

Q: Some finance experts advise consumers not to worry aboutrising gasoline prices, the cost of which…

A: Meaning of Tax Imposition: The term tax imposition or the tax hike refers to the situation under…

Q: Suppose you are a typical person in the U.S. economy.You pay 4 percent of your income in a state…

A: State income tax amount can be calculated as follows.     Thus, state income tax will be $1,200.

Q: Suppose the market for grass seed can be expressed as: Demand: QD = 140 - p and Supply: Q> = 20 +…

A: A tax is the amount of dollars paid on a trade of each unit of a good or service. The tax could be…

Q: When the price elasticity of demand is low and the price elasticity of supply is high, the burden of…

A: Answer: option c (buyers of the product) Explanation: The burden of the tax falls more on buyers if…

Q: True or false the burden of of the tax falls on the party who actually pays the money for the tax to…

A: Taxes are an important government policy instrument that is used to collect revenue from the public…

Q: Suppose in Fiscalville there is a O percent tax on the first $10,000 of income, but there is a 20…

A: Given information:

Q: Suppose the demand curve for a good is highly elastic and the supply curve is highly inelastic. If…

A: The burden of a tax is generally shared by the buyers and sellers in a market.  In other words, the…

Q: The demand for mineral water is P=10 – (2/3) Q and supply function for mineral water isP=1+(1/3)Q…

A: P = 10 – (2/3)Q (Demand Equation) P = 1+(1/3)Q  (Supply Equation) To find out the equilibrium…

Q: Which of the following makes up the largest sliceof the budgetary pie?a. defense expendituresb.…

A: Budget is the formation of the income and expenditure for the future use of an economy and its…

Q: Which of the following statement is true about tax? A. The burden shared by consumers and producers…

A: Answer: Correct option: option (D) Explanation: When a tax is levied either on the buyer or seller,…

Q: Suppose in Fiscalville there is a 5 percent tax on the first $10,000 of income, but there is a 15…

A: The average tax rate is the total amount of tax divided by total income.

Q: Suppose a firm has demand and supply are given by: Qd = 17−  2Px and Q s = 4Px  − 1   c. How much…

A: The tax revenue is the amount that is collected by the government through the tax. Given tax rate =…

Q: Government levied a tax on good A. The less elastic the demand is, the greater or the smaller the…

A: The demand for the good is said to be elastic if the quantity demanded of the commodity changes more…

Q: Define Situs of Taxation.

A: Situs of taxation virtually means place of taxation the overall rule is that the taxing power cannot…

Q: Suppose you are a typical person in the U.S. economy. You pay 4 percent of yourincome in a state…

A: Taxes are referred to as mandatory contributions which are levied on individuals or businesses by…

Q: Tax incidence refers to ? A. the average tax rate. B.how much revenue a tax generates. C.the extent…

A: The tax incidence means the division of tax burden between buyers and sellers. It refers to the…

Q: President Biden proposed increasing the corporate tax rate from 21% to 28%. However, this reform has…

A: Given below is the information: *The corporate tax rate increases from 21% to 28%. *Increase in…

Q: What happens to the tax revenue when the tax on a good increase gradually? (a) Will rise (b) Will…

A: ‘Deadweight Loss(DWL)’ can be defined as a cost that is created to society due to any kind of market…

Q: Suppose a tax is such that an individual with an income of $10,000 pays $2,500 of tax, a person with…

A: The effect of taxes on incentives to raise, save, or spend is calculated by average tax rates, while…

Q: Consider a product that is fixed on supply QS=4 and the demand for the product is given by QD=…

A: Elasticity of demand is the % change in quantity demanded due to 1% change in price. Elasticity of…

Q: Suppose in Fiscalville there is a 0 percent tax on the first $10,000 of income, but there is a 20…

A: "Since you have posted a question with multiple sub-parts,we will solve first three parts for you.To…

Q: Suppose in Fiscalville there is a 5 percent tax on the first $10,000 of income, but there is a 15…

A: