--%>
Assignment Help - homework help

Assertion for the levying of a tax on air polluters

Use the circular flow model to confirm this assertion for the levying of a tax on air polluters?

E

Expert

Verified

This will be an increase in net taxes paid by business. Since business will regard this as an increase in costs, it will decrease its demand for resources, leading to a decreased flow of income to the resource markets.  With less money income, households will decrease their consumption demand for goods and services from businesses and business receipts will be less.  Also, the decrease in household income will lead to a decrease in net household taxes paid to government.

The distribution of income will be slightly away from profits and therefore toward the other three categories.  To the extent that total tax revenues increase, there will be a slight increase in allocation of resources to government away from private enterprise.  There will also likely be a reallocation of resources towards pollution control equipment.  The increased costs to business, having caused decrease in supply, will tend to increase unemployment and prices.

   Related Questions in Business Economics

  • Q : Competition is the essential despot of

    Evaluate and explain the statements: “Competition is the essential despot of the market economy”.

    		•
  • Q : Regression Your firm is worried about

    Your firm is worried about being sued for gender discrimination. There is a growing perception that males are being paid more than females in your department. Using the data in the SALARY tab in the Excel file provided, please complete the following using a = .05 a). Do the men appear to earn mo

    		•
  • Q : Utilization of resources in production

    The points on a production possibilities curve communicate to combinations of goods which: (1) Can’t be generated with no technological advances. (2) Utilize all resources fully and efficiently in the production. (3) Can be generated, however use economic capaci

    		•
  • Q : Calculating fat-tax Question: Max has a

    Question: Max has a utility function U =√ x1x2 where x1 is litres of ice-cream and x2 is boxes of strawberries. The marginal utility of a litre if ice-cream is

  • Q : Problem on prisoners dilemma game Lets

    Lets assume an infinitely repeated prisoner’s dilemma game by two players. The resulting payoffs at each phase by the actions of two players are illustrated below in the table (payoffs are symbolized like (payoff for player 1, payoff for player 2)). Two players

    		•
  • Q : Market efficiency while transaction

    Transaction costs tend to be decreased and markets are more efficient when: (w) the government subsidizes a good. (x) inter-market price differentials are eliminated through arbitrage. (y) taxes are used to give for social wants. (z) regulations close

    		•
  • Q : Impact of dollar on aspects of

    Question Discuss the impact of dollar depreciation on the various aspects of American Economy. Devaluation of the DollarIntroduction:

    		•
  • Q : Case of arbitrage while selling and

    Assume that melons sell for $5 in Brazil when moose pelts sell for $10, still into Canada melons sell for $10 as well as moose pelts sell for $5. A person who buys moose pelts within Canada to sell into Brazil would be doing: (1) speculation. (2) the “invisible

    		•
  • Q : Internal factors which influencing the

    Write down the internal factors which influencing the capital structure?

    		•
  • Q : Equilibrium market rate & Undervalued

    Question: a. In the short-run, it is easier for a country to maintain a peg that undervalues a currency (relative to the equilibrium market rate) than it is to maintain a peg that overvalues the currency (relative

    		•