Macbeth
Páginas: 2 (351 palabras)
Publicado: 24 de octubre de 2012
Economy prep
a) Indirect Tax: a tax, such as a sales tax or value added, that is levied on goods or services rather than individuals and is ultimately paid by consumers in the formof higher prices.
b) Specific Tax: a tax whose rate is based on a particular quantity of a product, rather than on its value.
4) The tax of the cigarettes increase so it make theprice increase also and create a shift to the left. But as the good is inelastic the quantity demand will not fall very much although the price goes up, because cigarettes are a habit inpeople and they cant stop buying them.
This increase in price, gives place tu an increase in the producers revenue because the price rise in a bigger ratio that the one in which thedemand supplied decrease. This also will make the government tax increase because the tax rise, but the demand is almost the same.
We can see that the good is inelastic, this means that thetax will fall mainly on the consumers rather than on the producer.
As cigarettes are an habit they will be inelastic, so any change in price will not change in big way the demand. Thismakes the producers take advantage so they can make the consumer pay the tax.
On the other hand the price for food decrease because tax has gone down, this creates a shift of supply to theright. As it is an elastic good, as price decrease, the demand for food rise very much. The price of food decrease in a very smaller ratio than the one in which demand increase, this meansthat the revenue of the producers increase in a big way.
As it is an elastic good, the tax will fall mainly on the producers. This is because if they pass some of the tax to the consumers,the rise in price will make the demand fall in a considerable way. As the price decrease very little compared to the increase in demand the tax revenue of the government will increase.
a) Indirect Tax: a tax, such as a sales tax or value added, that is levied on goods or services rather than individuals and is ultimately paid by consumers in the formof higher prices.
b) Specific Tax: a tax whose rate is based on a particular quantity of a product, rather than on its value.
4) The tax of the cigarettes increase so it make theprice increase also and create a shift to the left. But as the good is inelastic the quantity demand will not fall very much although the price goes up, because cigarettes are a habit inpeople and they cant stop buying them.
This increase in price, gives place tu an increase in the producers revenue because the price rise in a bigger ratio that the one in which thedemand supplied decrease. This also will make the government tax increase because the tax rise, but the demand is almost the same.
We can see that the good is inelastic, this means that thetax will fall mainly on the consumers rather than on the producer.
As cigarettes are an habit they will be inelastic, so any change in price will not change in big way the demand. Thismakes the producers take advantage so they can make the consumer pay the tax.
On the other hand the price for food decrease because tax has gone down, this creates a shift of supply to theright. As it is an elastic good, as price decrease, the demand for food rise very much. The price of food decrease in a very smaller ratio than the one in which demand increase, this meansthat the revenue of the producers increase in a big way.
As it is an elastic good, the tax will fall mainly on the producers. This is because if they pass some of the tax to the consumers,the rise in price will make the demand fall in a considerable way. As the price decrease very little compared to the increase in demand the tax revenue of the government will increase.
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