What do you think would happen to total consumption

Assignment Help Microeconomics
Reference no: EM132126445

Question: Suppose the government decided to levy the current 15.3% social security tax on all levels of wages and salaries, not just the first $80,000, and used all the money collected to pay for prescription drug benefits for the poor and the aged. What do you think would happen to:

(A) Total consumption?

(B) Purchases of consumer durables?

(C) The price of pharmaceutical company stocks?

(D) The price of drug store stocks?

(E) The overall stock market?

How would your answers to (C) to (E) change if, as part of the legislation, drug prices were now set by the government?

Reference no: EM132126445

Questions Cloud

Confidence interval for the population proportion : Construct a? 99% confidence interval for the population proportion. Interpret the results.
What is the probability that the hotel receives at least one : What is the probability that the hotel receives at least one of the defective sets?
What would you expect to happen to the rate of growth : Suppose that the Federal funds rate rose from 3% to 6% during the year. What would you expect to happen to the rate of growth in real consumption.
Complete on service and price : Couriers such as UPS and FedEx complete on service and price. One way to reduce cost is to keep labor cost low by hiring and laying off workers to meet
What do you think would happen to total consumption : Suppose the government decided to levy the current 15.3% social security tax on all levels of wages and salaries, not just the first $80,000.
Is it sufficient to adequately address future challenges : How would you assess the current model of shared responsibility between the government security and private sectors?
How would the changes affect current consumption plans : According to legislation as of late 2002, the death tax (estate tax) is supposed to be fully phased out by the year 2010, but then reinstated at a maximum.
Enforcing laws governing weights and measures routinely : A federal agency responsible for enforcing laws governing weights and measures routinely inspect packages
How each of the given factors contributed to the changes : The ratio of capital spending to GDP rose sharply during the latter 1970s, even though bond yields rose sharply during that period.

Reviews

Write a Review

Microeconomics Questions & Answers

  What is initial point of long-run macroeconomic equilibrium

What is the initial point of the long-run macroeconomic equilibrium and What are the equilibrium values? What does the appearance of the long-run aggregate-supply (LRAS) curve indicate? How does it differ from AS?

  Why might taxi companies in other cities own their cars

In some cities taxi drivers must buy their own cars or lease them from an approved agency rather than operate cars from a fleet owned by the company they work.

  Find the change in official reserves

The (private) financial account balance was $188 million. The net errors and omissions (statistical discrepancy) in the balance of payments was $7.894bn. Find the change in official reserves, and explain what actions the reserve bank took.

  How do explicit and implicit cost relate to opportunity cost

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs? List and describe the characteristics of a perfectly competitive market.

  Would you advise the company to raise the price

Suppose you are in charge of sales at a pharmaceutical company, and your firm has a new drug that causes bald men to grow hair. Assume that the company wants.

  Identifies significant supporting data or evidence

Identifies significant supporting data/evidence and evaluates its relevance and credibility; consistently distinguishes between fact and opinion.

  What will be the domestic price-consumption and production

Now suppose the government decides to subsidize the production of sugar (regardless of who it is sold to). The government wants to achieve the same increase in domestic production as in part d). What should be the amount of such production subsidy..

  Partial equilibrium effects of congestion taxes

Assuming the revenue from a congestion tax is not redistributed to city residents, what effect would a congestion tax have on the residential bid rent curve? If the government reduced other taxes after instituting a congestion tax, how would the resu..

  What is the effect of the new technology on the society

the effect of new technology on consumers is that it makes life easier for society. Cell phones have become miniature computers that can do just about anything we want now. Our cell phone for the past few years have a lot more processing power tha..

  What stage of culture shock is kelly family experiencing

Women represent an underutilized resource in international management. A major reason for this situation is the assumption that culturally based biases may limit the opportunities and success of female managers and employees.

  How are the given announcements related

In November 2010 Netflix announced a new lower price for streaming video direct to home televisions. At the time, Netflix had no serious competitors-Netflix's.

  Horizontal and vertical analysis of financial statements

Q.1. What do you mean by horizontal and vertical analysis of financial statements? Q.2. Discuss the categories of Ratios with the help of suitable example.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd