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Karolina [17]
3 years ago
10

A deadweight loss is a consequence of a tax on a good because the tax a. induces the government to increase its expenditures. b.

induces buyers to consume less, and sellers to produce less. c. increases the equilibrium price in the market. d. imposes a loss on buyers that is greater than the loss to sellers.
Business
1 answer:
zalisa [80]3 years ago
7 0

Answer:

B) induces buyers to consume less, and sellers to produce less.

Explanation:

Taxes are a necessary evil since they always increase the price of the goods and services that consumers buy and decrease the amount of money that producers receive from selling their goods and services. But taxes are necessary and unavoidable.

But once a market assumes all the effects of existing taxes it reaches an equilibrium price that both consumers and producers are satisfied with. If a new tax is levied than the deadweight losses are greater since consumer surplus and producer surplus are both reduced. This will lead to a reduction in the incentive that both consumers and producers have to engage in transactions. Many times consumers will substitute heavily taxed goods for other goods since they feel they are getting more from consuming those goods (consumer surplus). The same happens to producers, many producers will change their heavily taxed goods for other goods.

If the price elasticity of demand or supply of a certain good is large (elastic demand and supply), the deadweight loss will be greater.

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Benson Company produces flash drives for computers which have variable costs of $10 per flash drive to produce. Each flash drive
zvonat [6]

Answer:

The answer is: The break even level increases in 50 units.

Explanation:

First we calculate the break even point without the increase in variable costs:

Break even point = fixed costs / contribution margin per unit

                             = $4,500 / ($20 - $10) = 450 units

Then we calculate the new break even point with the increase in variable costs:

New break even point = $4,500 / ($20 - $11) = 500 units

The difference between the new and old break even points is:

= 500 units - 450 units = 50 units

4 0
3 years ago
Given the equity portion of a firm's balance sheets below, determine the average price per share at which new shares were sold b
Tpy6a [65]

Answer:

$9.37 per share

Explanation:

The computation of the average price per share is shown below:

Common stock in the year 2019 $830,200

Less Common stock in the year 2018 $620,600

Rise in common stock $209,600

Divided by Par value per share $0.40

Number of new common shares sold 524,000

Now  

Increase in capital surplus [$13,726,000 - $9,025,000 ] $4,701,000

Add:  Increase in common stock $209,600

Total proceeds from sale of new shares $4,910,600

Divided by Number of new common shares sold 524,000

Average price per share 9.37

7 0
3 years ago
Prior to June 30, a company has never had any treasury stock transactions. A company repurchased 100 shares of its $1 par common
bogdanovich [222]

Answer:

When shares are repurchased, they are recorded at the cost price in the books which means that they will be recorded at:

= 100 * 40

= $4,000

Cash will then be credited because assets are credited when they reduce.

Treasury stock will be debited to show that Equity is reducing.

Date                       Account Title                                 Debit                  Credit

June, 30                Treasury Stock                            $4,000

                               Cash                                                                       $4,000

7 0
3 years ago
In the monetarist view, the long-run Phillips curve is____________.
ollegr [7]

Answer:

The correct answer is option E.

Explanation:

The Philips curve shows the inverse relationship between inflation and unemployment. The Philips curve, in the short run, is downward sloping L shaped indicating this inverse relationship.

But according to economists, in the long run, there is no trade-off between inflation rate and unemployment. The inflation and unemployment are related in the short run, they are not related in the long run.

The long-run Phillips curve is a vertical line at the point of the natural rate of unemployment.

6 0
3 years ago
If a tax is levied on the sellers of a product, then the demand curve will a. become flatter. b. not shift. c. shift up. d. shif
Lera25 [3.4K]

If a tax is levied on the sellers of a product, then the demand curve will become flattered.

Option A. becomes flattered.

If a tax is levied on sellers of a product, then the supply decreases, the supply curve will shift to the left. The demand curve will not shift. This is shown in the following figure;

S+tax Price E1 pl p 0 q1 q Quantity х

In the above figure, the x-axis shows quantity and the y-axis shows the price. D is the demand curve and S is the supply curve. As a result of the tax, the supply curve will shift to the left. The price increases from p to p1 and quantity decreases from q to q1.

Learn more about levied at

brainly.com/question/3853375

#SPJ1

7 0
2 years ago
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