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cise Taxes and Tax Revenue The government pays attention to elasticity of demand when it selects goods and services on which to levy excise taxes (taxes levied on the production of a product or on the quantity for the product purchased). If a $1 tax is levied n a product and 10,000 units are sold, tax revenue will be $10,000 $1 X 10,000 units sold).If the government raises the tax to $1.50, but the higher prices that results reduces sales (quantity demanded) to 4000 because demand is elastic, tax revenue will decline to $6000 $1.50 X 4000 units sold). So a higher tax on a product that has an elastic demand will b ring in less tax revenue. In contrast, if demand is inelastic, the tax increase from $1 to $1.50 will boost tax revenue. For example, if sales fall from 10,000 to 9000, tax revenue will rise from $10,000 to $13,500 $1.50 X 9000 units). Little wonder that legislatures tend to seek out products such as liquor, gasoline, cigarettes, and phone services when levying and rising taxes. Those taxes yield high tax revenues.
Question: Under what circumstance might a reduction of an excise tax actually produce more tax revenue?
Compute the MIRR we need a finance rate and an reinvestment rate and finance and a reinvestment rate are needed to compute the return on invested capital (RIC) for non-simple cash flows.
Most macroeconomists believe it is a good thing that taxes act as automatic stabilizers and lower the size of the multiplier. However, a smaller multiplier means that the change in government purchases of goods and services, government transfers
Compute the internal rate of return for a machine that costs $20,000 and provides annual revenue of $5,000 per year for five years. You can assume all revenue is received once a year at the end of the year.
Explain how the short-run Phillips curve, the long-run Phillips curve, the short-run aggregate supply curve, the long-run aggregate supply curve, and the natural rate hypothesis are all related. How do active and passive views of these concepts di..
the market for social games on facebook is perfectly competitive. the demand curve for games published is given by
What is the history of inflation in the US in the last 10 years, with particular emphasis on the on the great recession and the recovery?
Pham can work as many or as few hours as she wants at the college bookstore for $11 per hour. But due to her hectic schedule, she has just 19 hours per week that she can spend working at either the bookstore or at other potential jobs
As you may recall from the readings, money demand rises when the price level rises because people will need more money to make their everyday purchases. For example, if the price index rose from 100 to 140.
be sure to explain your answers completely and show you read each article and thought about what it said.question1
On Sunday October 23rd, Eastern Turkey was hit by a strong earthquake. Analyze the effects of this temporary negative supply shock on the real output and real interest rates using an IS-LM model. b. Show the effect of this negative supply shock.
What is the group that determines the start and end dates to recessions? What indicators do they study to make these chronological decisions?
What will be the profit maximizing prices and the firm's profit, if the proposal of the marketing manager is accepted and calculate the profit maximizing price of the full package? What is the firm's profit in this case
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