(Please make an answer for each good listed) TIA 3.) If the government wants to raise...

(Please make an answer for each good listed) TIA

3.) If the government wants to raise tax revenue, which of the following items are good candidates for an excise tax? Why?

a.) granola bars

b.) cigarettes

c.) toilet paper

d.) automobile tires

e.) bird feeders

Solutions

Expert Solution

a) Demand for granola bars is elastic because other substitutes are available. So, an increase in price of granola bars will not lead to increase in tax revenue.

b) Demand for cigarettes is inelastic because other substitutes are not available in tobacco segment. So, if price of cigarettes increases, people continues to demand it. Thus, an increase in price of cigarettes lead to increase in tax revenue.

c) Demand for toilet paper is inelastic because other substitutes are not available. So, if price of toilet paper increases, people continues to demand it. Thus, an increase in price of toilet paper lead to increase in tax revenue.

d) Demand for automobile tires is elastic because if price of tires increases, people will not buy tires frequently and will opt for other mode of transportation. So, an increase in price of automobile tires will not lead to increase in tax revenue.

e) Demand for bird feedre is elastic because bird feeders are not highly demanded. So, if price of bird feeders increases, people will start buying their own wood which will be cheaper and make their own bird houses.

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Consider a government that wants to raise investment spending in the economy. Perhaps the government is...

Consider a government that wants to raise investment spending in the economy. Perhaps the government is concerned about future economic growth and so wants to promote investment in order to raise growth. However, the government also does not want to increase inflation. Inflation could be caused by excessively high output growth pushing up prices. Therefore, the government does not want output to increase more than normal. Use the following questions to think about how the government could raise investment without...

Is government debt good or bad? Please answer in 250 words or more.

20- The imposition of a tax on a good enables the government to raise the price...

20- The imposition of a tax on a good enables the government to raise the price received by sellers of the goods that have been taxed. lower the price paid by buyers for the goods that have been taxed. create a more efficient economic system. take part of consumer and producer surplus as tax revenue when the good is purchased. 21- The demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore, sellers bear most of the...

Suppose that the government wants to raise investment but keep output constant. In the IS-LM model,...

Suppose that the government wants to raise investment but keep output constant. In the IS-LM model, what mix of monetary and fiscal policy will achieve this goal? In the early 1980’s, the US government cut taxes and ran a budget deficit while the Fed pursued tight monetary policy. What effect should this policy mix have?

Please answer the following in regard to Varicella Zoster, sources/references would be greatly appreciated. TIA Varicella...

Please answer the following in regard to Varicella Zoster, sources/references would be greatly appreciated. TIA Varicella Zoster is caused by? Varicella Zoster is identified by the following characteristics: Incubation period: Symptoms: Following the presentation of patients with symptoms indicative of Varicella Zoster diagnosis may be made through: Treatments may include: Preventative methods for preventing the growth and establishment of Varicella Zoster Carriers Transmission Epidemiology Prevalence Target population: Susceptibility Current Research:

Please teach each answer and please explain. Q1.Which of the following is true of government purchases?...

Please teach each answer and please explain. Q1.Which of the following is true of government purchases? A)Government purchases are independent of consumption. B)Government purchases are independent of the level of real GDP. C)Government purchases are independent of the amount saved by households. D)Government purchases are independent of investment. Q2. If an economy’s actual GDP exceeds its potential GDP, _____. A) self-correcting forces will shift the SRAS curve to the left B) wages and prices must fall C) unemployment is likely...

American Government Please type this answer and make sure all is answered including the second half...

American Government Please type this answer and make sure all is answered including the second half of the question - What are the advantages and disadvantages of having so many levels of subnational governments in the United States? Explain. Do term limits seem to have more advantages or disadvantages? Defend your answer.

A senator wants to raise tax revenue and make the workers better off. A staff member...

A senator wants to raise tax revenue and make the workers better off. A staff member proposes raising the payroll tax paid by firms and using part of the extra revenue to reduce the payroll tax paid by workers. Would this accomplish the senator’s goal?

Please answer the following questions below for EACH of the drugs listed: Baclofen cyclobenzaprine zolpidem What...

Please answer the following questions below for EACH of the drugs listed: Baclofen cyclobenzaprine zolpidem What is the classification of this medication? What conditions is/are this med used for? How is it administered? How does it work in the body? What are the contraindications? What signs and symptoms will you monitor? What will you teach your patient about the medication?

6.1 question 16 please make answer clear Electricity bills: According to a government energy agency, the...

6.1 question 16 please make answer clear Electricity bills: According to a government energy agency, the mean monthly household electricity bill in the United States in 2011 was $109.99. Assume the amounts are normally distributed with standard deviation $17.00. Use the TI-84 Plus calculator to answer the following. (a) What proportion of bills are greater than $120? (b) What proportion of bills are between $80 and $135? (c) What is the probability that a randomly selected household had a monthly...

Subjects