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- Follow up question regarding elasticities and taxes.You have a charger of your phone at home and you are relativley poor. When your income increases, what is income elasticity of itHi may explain to me how to solve the question step by step? TQ Sally Henin has a price elasticity of demand for gasoline of -0.8. Her income elasticity for gasoline is 0.5. Sally's current income is $40,000 per year. Sally currently spends $800 per year on gasoline. The price of gasoline is currently $1.00 per gallon. a. A contemplated excise tax on gasoline will cause the price of gasoline to rise to $1.40. What impact will the tax have on Sally's consumption of gasoline? b. Since the purpose of the tax is only to discourage gasoline consumption, Congress is considering a $200 income tax rebate to lessen the burden of the gasoline tax. What impact will the rebates have on Sally's consumption of gasoline? 3. Assume that both the tax and rebate are implemented. Will Sally be worse off or better off?
- You have a charger of your phone at home and you are relativley poor. When your income decreases what is income elasticity of it (roughly)How does elasticity impact the incidence of a tax?the pilge elasticity of cemand for a product is05. then a price cut fromn $3.00 to $2.70 wll Multiple Choice leBook, increase the quantity demanded by about 50 percent. decrease the quantity demanded by about 5 percent. 33好好好洛影 B888868 increase the quantity demanded by about 5 percent. increase the quantity demanded by about 20 percent. 15
- When airfares between Santa Rosa and Los Angeles averages $69, the quantity consumed is 42,500 tickets. One day, an airline tax is levied equal to $10.00 and output falls to 37,000 tickets. Assume that air travelers end up paying 75% of the tax. Calculate the price elasticity of demand and & interpret coefficient. Use the general formula, not the mid point formula Calculate the price elasticity of supply and interpret coefficient. Use the general formula, not the mid point formula. How do total sales in the airline market before and after the tax support your answer in (n) and/or (o)?The supply of wigits is pefectly elastic and the demand for wigits has a price elasticity of 2 and an income elasticity of 1 (a) If income increases by 25 percent then the equilibrium quantity will_____(increase, decrease, not change) by_____percent and the equilibrium price will ____ (increase, decrease, not change) (b) If a 25 percent tax is imposed on wigits then the quantity consumed will_____(increase, decrease, not change) by____percent and the equilibrium price, inclusive of the tax, will increase by____ percent.The graph shows the market for a vital-to-life drug on which the government has imposed a tax of $2 per dose. The buyer pays the entire tax. Draw the demand curve for this drug. Label it D. the demand for the drug. OA. inelastic; the larger is the amount of the tax paid by the buyer of the drug OB. elastic; the more equally is the tax split between the buyer and the seller of the drug OC. elastic; the larger is the amount of the tax paid by the buyer of the drug OD. inelastic; the more equally is the tax split between the buyer and the seller of the drug The more esc @ AAG 2 1 O И/ # 3 C $ 4 % 5 Oll 6 & 7 O * 00 8 O ( 9 12 8- Price (dollars per dose) S+tax 10 Quantity (millions of doses per year) >>> Draw only the objects specified in the question. 0 G 36
