Applications 10.1 a. Who can more easily \"run\" from an excise tax, the consume
ID: 2506334 • Letter: A
Question
Applications
10.1
a. Who can more easily "run" from an excise tax, the consumer or producer? Explain
10.2
a. Using figure 10.7, what is the deadweight loss triangle in the short run and in the long-run? What explains the difference?
http://www.wiley.com/college/browning/0471389161/pdf/ch10
b. Why are elected local leaders less concerned than economists about rent controls adverse effects?
10.5
a. How did the increased tariffs on U.S. steel imports result in a net job loss for the U.S?
Explanation / Answer
a. Who can more easily "run" from an excise tax, the consumer or producer? Explain
ANS.
An excise or excise tax is an inland tax on the sale, or production for sale, of specific goods or a tax on a good produced for sale, or sold, within a country or licenses for specific activities.Excise is considered an indirect tax, meaning that the producer or seller who pays the tax to the government is expected to try to recover or shift the tax by raising the price paid by the buyer.
Excise taxes are considered an indirect form of taxation because the government does not directly apply the tax. An intermediary, either the producer or merchant, is charged and then must pay the tax to the government.
NOW IT IS CLEAR THAT A PRODUCER CAN EASILY RUN FROM THE EXISE TAX BY INCLUDING IT IN THE PRICE OF THE GOOD.
b. Why are elected local leaders less concerned than economists about rent controls adverse effects?
ANS. BECAUSE IT IS MATTER OF GOVTS FISCAL AND MONETARY POLICY, WHICH COMES UNDER THE AGIES OF
ECONOMISTS OF THE ECONOMY.
How did the increased tariffs on U.S. steel imports result in a net job loss for the U.S?
ANS.A tax imposed on imported goods and services. Tariffs are used to restrict trade, as they increase the price of imported goods and services, making them more expensive to consumers.SO OBVIOUSLY IT WILL DISCOURAGE THE IMPORT OF STEEL FROM U S. THUS LESS DEMAND FOR US STEEL, WHICH WILL RESULT IN LESS PRODUCTION MEANS LESS INVESTMENT AND HENCE LESS EMPLOYMENT AND HENCE net job loss for the U.S.
what is the deadweight loss triangle in the short run and in the long-run? What explains the difference?
ANS- DEAD WEIGHT LOSS IS
The costs to society created by market inefficiency. Mainly used in economics, deadweight loss can be applied to any deficiency caused by an inefficient allocation of resources. Price ceilings OR RENT CONTROLL and taxation are all said to create deadweight losses. Deadweight loss occurs when supply and demand are not in equilibrium. IN THE FIGURE 10.7 SHORT RUN DEAD WEIGHT LOSS IS SMALLER TRIANGLE BCE AND LONG RUN DEAD WEIGHT LOSS IS BIGGER TRIANGLE FGE.
WHEN RENT CEILING IS IMPOSED UNEXPECTEDLY, THE QUANTITY OF RENT UNITS TOMMOROW WILL BE UNEFFECTED BY THE PRICE CHANGE. IT TAKES TIME TO REDUCE THE SUPPY OF SUCH DURABLE GOODS. THUS ADVERSE EFFECTS ON THE SUPPLY SIDE ARE RELATIVELY SMALLER THAN THEY ARE IN THE LONG RUN. THAT IS WHY IN THE SHORT RUN INEFFICIENY IS LESS THAN IT IS IN THE LONG RUN. THAT IS WHY SHORT RUN DEAD WEIGHT LOSS IS SMALLER TRIANGLE BCE AND THAN THE LONG RUN DEAD WEIGHT LOSS IS BIGGER TRIANGLE FGE.
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