In this case, how much of the $5.00 excise tax is paid by the consumer?


Consider the following market for CFC-11, a known ozone-depleting substance:

Demand: Q= 20 – 1.5P Supply: Q= 5+0.5P

whereP is price per pound.

Assume the governmental authority imposes a $5 per pound excise
tax on CFC-11, which shifts the supply function to Q’ = 2.5 +0.5P.Use this information for any or all of the next three questions below.

a. $3.75
b. $2.25
c. $5.00
d. $1.25
e. none of the above


d. $1.25

Economics

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The word "monopolistic" in the label "monopolistic competition" refers to the fact that:

A. there is only one firm producing in the market. B. firms have no control over the price they charge. C. each firm produces a slightly different version of the product. D. None of these

Economics

On a graph, an upward-sloping curve that is flatter as you move away from the origin indicates a

A) positive relationship with an increasing slope. B) positive relationship with a decreasing slope. C) negative relationship with an increasing slope. D) negative relationship with a decreasing slope.

Economics

Which of the following would be most likely to encourage households to save a greater proportion of their income?

a. a reduction in the sales tax rate b. an increase in the capital gains tax rate c. an elimination of tariffs (taxes on imported goods) d. changing to a flat income tax (with a single tax rate charged on all income) e. changing from an income tax to a consumption tax

Economics

Which of the following countries has had the more successful transition?

a. Poland b. Russia c. Kazakstan d. Georgia e. Kyrgystan

Economics