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Hello, I have a few questions wih my homework. The topic is

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Hello, I have a few questions wih my homework. The topic is economics. I have about 6 questions that i need help with. Can you help?
Submitted: 1 year ago.
Category: Business and Finance Homework
Expert:  Angela--Mod replied 1 year ago.

Hello, I'm a moderator for this topic. I've been working hard to find a professional to assist you right away, but sometimes finding the right professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. Please let me know and I will assist further. Thank you!

 

Best,

Angela

Expert:  PDtax replied 1 year ago.
Hi from just Answer. I'm PDtax, and I can assist with your questions.

Can you post them so that I can review and assist? If I can't help, I will advise. Also, please post your deadline for completion.

PDtax
Customer: replied 1 year ago.


Hello, Thanks for the reply. Here are the questions.


 


 


1 Suppose that the U. S. were involved in a trade dispute with the European Economic Community over tariffs which they had imposed on our goods. If we wished to impose a retaliatory tariff on their goods, would it be more effective to impose the tax on their olive oil or on their beer? Explain your reasoning.


 


2 Would you expect the price elasticity of demand for a particular brand of breakfast cereal, such as “Wheaties,” to be higher or lower than the elasticity of demand for the total breakfast cereal market?


 


 


3 "At least half a dozen states and cities from Florida to Hawaii now impose $2 to $7 surcharges on car rentals. These fees can amount to as much as a 30% tax on 1day rentals."


Explain why states and cities are tempted to tax car rentals at higher rates than other goods and services.


 


4 Why would two railroads seeking approval for a merger from the department of justice, present evidence that the cross price elasticity of rail and trucking freight services is high and positive?


 


5 "Karen is considering purchasing a pair of shoes that cost $120 or a skirt that costs $80. If she ends up purchasing the skirt, then we can infer that the marginal utility of that additional skirt was greater for her than the marginal utility of the additional pair of shoes." Is the statement in quotes true correct? Explain your answer.


 


6 Why does the demand schedule for a typical good or service slope downward? i.e. Why does quantity demanded increase, when price decreases, other things equal. Explain in a few sentences.

Expert:  PDtax replied 1 year ago.
1 Suppose that the U. S. were involved in a trade dispute with the European Economic Community over tariffs which they had imposed on our goods. If we wished to impose a retaliatory tariff on their goods, would it be more effective to impose the tax on their olive oil or on their beer? Explain your reasoning. Retaliatory tariffs are intended to punish perceived inequities, and the more public attention given, the more effective such tariffs will be. Raising the price of imported beer will likely get more publicity, and therefore be a more effective choice.


2 Would you expect the price elasticity of demand for a particular brand of breakfast cereal, such as “Wheaties,” to be higher or lower than the elasticity of demand for the total breakfast cereal market? I would expect it to be higher, since an increase in price would likely convince a consumer to change to another brand.


3 "At least half a dozen states and cities from Florida to Hawaii now impose $2 to $7 surcharges on car rentals. These fees can amount to as much as a 30% tax on 1day rentals."

Explain why states and cities are tempted to tax car rentals at higher rates than other goods and services. Because local taxpayers (and voters) do not pay these charges, but out of town visitors (who don't vote in that location) do, it's politically easier to raise revenues this way.


4 Why would two railroads seeking approval for a merger from the department of justice, present evidence that the cross price elasticity of rail and trucking freight services is high and positive? A high positive cross-price elasticity tells us that if the price of one good goes up, the demand for the other good goes up as well. The argument for merger is that costs for rail service would decline, which would be the reason for the merger. To argue against the merger would be to accept that separate entities would cost the consumer more for rail service.


5 "Karen is considering purchasing a pair of shoes that cost $120 or a skirt that costs $80. If she ends up purchasing the skirt, then we can infer that the marginal utility of that additional skirt was greater for her than the marginal utility of the additional pair of shoes." Is the statement in quotes true correct? Explain your answer. The question is not correct in that it does not consider the availability of funds; the price of the skirt was less, and its purchase may have been the only option available to Karen. It also doesn't consider the number of existing skirts or dresses owned, which is part of the concept of marginal utility.


6 Why does the demand schedule for a typical good or service slope downward? i.e. Why does quantity demanded increase, when price decreases, other things equal. Explain in a few sentences. As price decreases, more product will be demanded by consumers, easiest explained by the easier it becomes to make a marginal purchase when price is lower. One might only sell five cars with a price tag of $1,000,000, but that same car offered for $200,000 might sell 100 units. It's more affordable.

Thanks for asking at Just Answer. I'm PDtax.
PDtax, Master's Degree
Satisfied Customers: 2108
Experience: MBA/CPA, Former college instructor and tutor.
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