Chapter 6: Q 6.4 (page 124)
Explain how the taxes government levy on purchases of goods and services affect market prices and equilibrium quantities.
The taxes levied by the government will greatly affect the market prices and equilibrium quantities.
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Why do you suppose that economists commonly refer to the elimination of all disability payments from the people able to work part time as a 'tax' imposed on disabled individual who is willing and able to earn part time income.
6-3. Consider the table below when answering the following questions. Show your work, and explain briefly.
a. What is Christino's marginal tax rate?
b. What is Jarius's marginal tax rate?
c. What is Meg's marginal tax rate?
To raise funds aimed at providing more support for
public schools,astate government has just imposed
aunit excise tax equal to\(4for each monthly unit
of wireless phone services sold by each company
operating in the state.The following diagram
depicts the positions of the demand and supply
curves for wireless phone services before the unit
the excise tax was imposed. Use this diagram to deter
mine the position of the new market supply curve
now that the tax hike has gone into effect.
a.Does imposing the \)4-per-month unit excise tax
cause the market price of wireless phone ser
vices to rise by\(4per month?Why or why not?
b.What portion of the \)4-per-month unit excise
tax is paid by consumers? What portion is paid
by providers of wireless phone services?
Why might people be willing to sacrifice dollars to avoid "feeling bad" about flouting tax laws?
For purposes of assessing income taxes, there are three official income levels for workers in a small country: high, medium, and low. For the last hour on the job during a 40-hour workweek, a high income worker pays a marginal income tax rate of 15 percent, a medium-income worker pays a marginal tax rate of 20 percent, and a low-income worker is assessed a 25 percent marginal income tax rate. Based only on this information, does this nation's income tax system appear to be progressive, proportional, or regressive?
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