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Elasticity and Tax Revenue
Choco Cookies sell for $40/box, of which $10 consists of tax, and 66,666 boxes are sold every year. The price elasticity of demand for Choco Cookies is -4. All other cookies sell for $30/box (including a $l0 tax), and 40,000 boxes are sold every year. The cross price elasticity of demand for other cookies, with respect to a change in the price of Choco Cookies, is 0.5. The government raises the tax on Choco Cookies from $10 to $l1 per box, all of which is passed through to the consumer in the form of higher prices. Calculate the change in total government revenue. Should the government raise the tax? Why or why not? Explain your answer.
1)Distinguish between expansionary fiscal policy and expansionary monetary policy
2)Describe the slow model of economic growth by Robert solow 1956 guided by the following subtopics (assumption production capital accumulation population growth and the golden rule)
What is the money supply
what is major advantage of flexible exchange rate
Discuss the effectiveness of supply side policy in increasing the supply of enterprise to the economy(12)
if kaci finds $1000 under her bed and deposits in a bank what is immediate change in the required bank reserves?
Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is
The IMF projects that China’s real GDP per person will be 57,163 yuan in 2017 and 60,334 yuan in 2018 and that India’s real GDP per person will be 98,028 rupees in 2017 and 104,191 rupees in 2018. By maintaining their current growth rates, which country will be first to double its standard of living and when will that happen?
6.“Burgerina” is a country situated on the distant planet Jupiter. It produces only 2 types of burger and the following information is presented to you:
In the year of 2016 the price & quantity of cheeseburgers -$4.00, 120
In the year of 2016 the price & quantity of Chickenburgers- $8.00, 10
In the year of 2017 the price & quantity of cheeseburgers- $5.00, 115
In the year of 2017 the price & quantity of Chickenburgers- $7.90, 7
In the year of 2018 the price & quantity of cheeseburgers- $8.00, 110
In the year of 2018 the price & quantity of Chickenburgers- $7.75, 2
a) Calculate nominal and real GDP (based on 2016) for Burgerina.
3. Based on the information presented in question 6, calculate the inflation rate for Burgerina for the years 2017 and 2018. Inflation should be calculated compared to previous years.
1.Based on the following statistic, form a price index (consider 2015 as the base year) for the country East Germany: Products
Computer Price & Quantity in 2015- $400,10
Computer Price & Quantity in2016- $300,10
Mobile Price & Quantity in 2015- $2,14
Mobile Price & Quantity in 2016- $10,14
Wheat Price & Quantity in 2015- $8,18
Wheat Price & Quantity in2016- $9,18
a) After forming a price index, calculate and comment on inflation of East Germany.
2.Explain with a diagram how a decrease in human capital can lead to detrimental results for economic growth (holding physical capital and technological progress constant)?
