Solution-How does taxation harm the economy?

How does taxation harm the economy?

Reference no: EM13887147

1. How does taxation harm the economy? If taxes hurt the economy, why do they exist?

2. Which would you expect to be larger, the price elasticity of demand for luxury goods, or the price elasticity of supply for luxury goods? Based on that, where do you expect the majority of the burden of a luxury tax to fall? Based on that, do you think that the luxury tax isaccomplishing its goals?

3. Draw a supply and demand diagram for a market with a unit tax. Be sure to label the deadweight loss, the consumer surplus, the producer surplus, and the government's revenue.

4. Name a good with an excise tax. Does it feature a negative externality? If so, what is it? If not, explain lawmakers' motivations for taxing that good extra.

Reference no: EM13887147

Questions Cloud

Importance of statistical software in marketing research : Write 1 to 2 well-developed and research-supported paragraphs discussing the importance of statistical software in marketing research data analysis

Draw an indifference curve passing through the point : Linus has a utility function U( x, y,) = x + 3y. Draw an indifference curve passing through the point (x ,y) = (3, 3), then draw an indifference curve connecting ever bundle such that U = 6. What is an equation the describes Linus's budget if px= 1, ..

What is the discount rate on this security : You would like to purchase a T- bill that has a $ 10,000 face value and 270 days to maturity. The current price of the T- bill is $ 9,860. What is the discount rate on this security? What is its bond equivalent yield?

Write an equation that describes her budget constraint : Clara's utility function is U(X,Y) = (X + 2)(Y +1). Write an equation for Clara's indifference curve that goes through the point (X,Y) = (2, 8). Suppose that the price of each good is one and that Clara has an income of 11. Write an equation that des..

How does taxation harm the economy? : How does taxation harm the economy? If taxes hurt the economy, why do they exist?

What is the bond equivalent yield : What is the bond equivalent yield of a 180- day, $ 1 million face value Treasury bill with a discount rate of 4.5 percent?

Find nas-cournot equilibrium level of output for each firm : Suppose two firms (Firm 1 and Firm 2) are competing against each other in a (duopoly) market. Suppose further that the demand is given by the equation P= 700-30(q1+q2), where P is the price of the good, q1 is the quantity sold by firm 1, and q2 is th..

Will peters prevail on his federal securities-law claims : Will Peters prevail on his federal securities-law claims? Will Peters prevail on his common-law claims? Will Ira likely prevail on his claim under the Securities Act of 1933?

Suppose insurance companies know with certainty driver type : Suppose there are two types of drivers on the road. Speed Racers have a 7% chance of causing an accident per year, while Low Riders have a 2% chance of causing an accident per year. Suppose the insurance companies know with certainty each driver’s ty..

User Account

All Pages

How does taxation harm the economy?

Reference no: EM13887147

Reference no: EM13887147

Questions Cloud

Reviews

Write a Review

Microeconomics Questions & Answers

At the end of six years company can sell capital used to

What is the return on investment

Legal regulatory limits and tradeable emissions permits

The supply and demand for this product.

1 suppose the market for melons can be described by the

1suppose the demand for a product is given by p 40 4q

What would supply curve look like if entry into occupation

Benefits from technological innovation

Strategic production decisions

Recognize and read at least three journal articles focused

How does this effect the shape of the ppc

Question about pricing

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT