7. Other things being equal, what will happen to automakers profits if they are

Question

7. Other things being equal, what will happen to automakers profits if they are able to sell more vehicles using battery packs and thereby scale up battery production?

8. Why do you suppose that some automakers support the payment of government subsidies to consumers who purchase hybrid and all-electric passenger vehicles?

9. If input prices had increased as firms entered the lithium industry in response to rising demand, what would have been the shape of the long-run supply curve?

10. If the market demand for lithium were to decrease during the 2020s. what would happen to the market clearing price of lithium in the long run?

11. Why do you suppose that employment growth is about 20 percent greater in unlicensed occupations than in licensed occupations?

12. What do you suppose a typical state government does with the millions of dollars of occupational license fees it receives each year.

13. Why do you suppose that some publishers are selling space for advertisements in their e-booksand sometimes even in physical books?

14. From an economic standpoint, how could we explain the willingness of someone to pay $19.99 for a physical book that is available as an e-book for $9.99?

Explanation / Answer

Question

Why do you suppose that some automakers support the payment of government subsidies to consumers who purchase hybrid and all-electric passenger vehicl
Answer

New next generation vehicles, including electric and fuel cell vehicles, plug-in hybrids, hybrid electric vehicles, clean diesel and natural gas vehicles are exempted from both the acquisition tax and the tonnage tax. Other fuel efficient and low emission passenger cars, mini cars, and heavy-duty vehicles have a tax reduction that vary between 50 to 75% depending on the compliance of the new vehicle as compared to 2010 fuel efficiency standards and their improvement with respect to 2005 emissions standards.[84][86] Acquisition taxes on used vehicles will be reduced by 1.6% to 2.7%, or between 150,000 yen (~US$1,600) and 300,000 yen (~US$3,200). Electric and fuel cell vehicles have a 2.7% reduction while plug-in hybrids have a 2.4% reduction.

These incentives are in effect from April 1, 2009 until March 31, 2012 for the acquisition tax which is paid once at the time of purchase. The tonnage tax reductions are in effect from April 1, 2009 until April 30, 2012 and the incentive is applicable once, at the time of the first mandatory inspection, three years after the vehicle purchase. As an example, the amount exempted for the purchase of a new next generation vehicle is 81,000 yen (~US$975) corresponding to the acquisition tax, and 22,500 yen (~US$271) for the tonnage tax, for a total of 103,500 yen (~US$1,246).
Automobile tax reductions
Consumers purchasing new next generation electric vehicles, including fuel cell, benefit of a 50% reduction of the annual automobile tax, and natural gas vehicles benefit only if their certified emissions are 75% down from 2005 standards. These incentives were in effect from April 1, 2009 until March 31, 2010, applicable only once
Incentives for purchasing new green vehicles

Subsidies for purchases of new environmentally friendly vehicles without scrapping a used car are 100,000 yen (~US$1,100) for the purchase of a standard or small car, and 50,000 yen (~US$550) for the purchase of a mini or kei vehicle. Subsidies for purchasing trucks and buses meeting the stipulated fuel efficiency and emission criteria vary between 200,000 yen (~US$2,100) to 900,000 yen (~US$9,600).
Subsidies for purchases of new environmentally friendly vehicles in the case of owners scrapping a 13 year or older vehicle are 250,000 yen (~US$2,700) for the purchase of a standard or small car, and 125,000 yen (~US$1,300) for the purchase of a mini or kei vehicle. Subsidies for purchasing trucks and buses meeting the stipulated fuel efficiency and emission criteria vary between 400,000 yen (~US$4,300) to 1,800,000 yen (~US$19,000).

Related Questions

Navigate

• Browse (All)
• Browse 7
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.