Professional Documents
Culture Documents
Economics Exam 4 Taxes Intern. Trade
Economics Exam 4 Taxes Intern. Trade
ID: UB77283EC86488
Bachelors in Economics
http://aiustudev.aiu.edu/submissions/profiles/resources/onlineBook/
a7C6g6_krugman%20economics.pdf
Bibliography of book:
Krugman, Paul. Robin Wells. "Economics." Worth Publishers, 4th Edition (2015).
.
Format of the assignment: Assignment must have an AIU cover page, introduction to
the topics of the chapter, answers to the questions below, conclusion about the exam
and the bibliography of book at end of assignment.
Instructions for Adding Course & Submitting Exam: Go to the top of your student
platform. On the left you will see a link to add a course called “Add Courses into Curriculum”.
Click there. Then you will see a button to add a new course. It will then ask you to give the
specific name of the course, which is given above on this exam.
Then you submit the assignment through another link at the top of the platform called “Submit
an assignment”. You choose the course name from the drop-down list. Then you choose to send
the assignment “offline”. Then you upload the file(s) for the course.
Please include questions with your answers, so that we can see the question being
answered.
Questions…
Chapter 7
1. The United States imposes an excise tax on the sale of domestic airline tickets. Let’s
assume that in 2013 the total excise tax was $6.10 per airline ticket (consisting of
the $3.60 flight segment tax plus the $2.50 September 11 fee). According to data
from the Bureau of Transportation Statistics, in 2013, 643 million passengers
traveled on domestic airline trips at an average price of $380 per trip. The
accompanying table shows the supply and demand schedules for airline trips. The
quantity demanded at the average price of $380 is actual data; the rest is
hypothetical.
a. What is the government tax revenue in 2013 from the excise tax?
$6,10 x 693 = 4´227.300.000
b. On January 1, 2014, the total excise tax increased to $6.20 per ticket. What is
the quantity of tickets transacted now? What is the average ticket price now?
What is the 2014 government tax revenue?
690 viajes, $378,10 y $4´278.000.000 Apenas un aumento de revenue del
1,20%
c. Does this increase in the excise tax increase or decrease government tax
revenue?
Lo aumenta en 1,20%
2. The U.S. government would like to help the American auto industry compete against
foreign automakers that sell trucks in the United States. It can do this by imposing
an excise tax on each foreign truck sold in the United States. The hypothetical pre-
tax demand and supply schedules for imported trucks are given in the
accompanying table.
b. Assume that the government imposes an excise tax of $3,000 per imported
truck. Illustrate the effect of this excise tax in your diagram from part a. How
many imported trucks are now purchased and at what price? How much does
the foreign automaker receive per truck?
Se mantiene una venta de 300.000 camiones a $30.000 cad a uno. El
fabricante de automóviles extranjeros recibe $27.000 por camion.
c. Calculate the government revenue raised by the excise tax in part b. Illustrate it
on your diagram.
El Revenue será $900 millones.
d. How does the excise tax on imported trucks benefit American automakers?
Whom does it hurt? How does inefficiency arise from this government policy?
No los beneficia ya que por la inelasticidad del precio y la elasticidad de la
demanda el importador de camiones va a mantener el precio. Es decir
que esto no beneficiaria directamente la venta de camiones de
fabricación local. Sale perjudicado el que vende camiones importados
ya que su ganancia se va a ver reducida debido a este impuesto. Es una
medida ineficiente porque no beneficia al fabricante local y al perjudicar
al fabricante extranjero terminaría el consumidor pagando el mismo
(ii) why government revenue raised from the tax is not a good indicator of the true
cost of the tax, and
Porque el costo real de un impuesto no se debe medir exclusivamente por el
ingreso que este le genere al estado. Se debe considerar si ese
impuesto recae sobre los consumidores o sobre los productores y en
que proporción recae en cada uno. Además se debe analizar los efectos
de ese impuesto en la oferta y la demanda de ese bien para poder
evaluar el costo real de ese impuesto.
a. The government imposes an excise tax on the sale of all college textbooks.
Before the tax was imposed, 1 million textbooks were sold every year at a
price of $50. After the tax is imposed, 600,000 books are sold yearly;
students pay $55 per book, $30 of which publishers receive.
Ocurre porque el impuesto esta causando que se vendan 400.000 unidades
menos y el consumidor esta pagando $5 de ese impuesto mientras
que a su vez el productor esta pagando $20 de ese impuesto y esta
vendiendo menos.
b. The government imposes an excise tax on the sale of all airline tickets. Before
the tax was imposed, 3 million airline tickets were sold every year at a price
of $500. After the tax is imposed, 1.5 million tickets are sold yearly; travelers
pay $550 per ticket, $450 of which the airlines receive.
Ocurre porque el impuesto esta causando que se vendan 1´500.000 tickets
menos y el consumidor esta pagando $50 más por ticket debido al
impuesto. Por otra parte las aerolíneas están dejando de vender un
50% de tickets y están recibiendo $50 menos por ticket.
c. The government imposes an excise tax on the sale of all toothbrushes. Before
the tax, 2 million toothbrushes were sold every year at a price of $1.50. After
the tax is imposed, 800,000 toothbrushes are sold every year; consumers
pay $2 per toothbrush, $1.25 of which producers receive.
Ocurre porque el impuesto esta causando que se vendan 1´200.000
cepillos menos y el consumidor esta pagando $0,50 más por cepillo
debido al impuesto. Por otra parte el productor está vendiendo solo
800.000 cepillos recibiendo $0,25 menos por cepillo.
4. The accompanying diagram shows the market for cigarettes. The current equilibrium
price per pack is $4, and every day 40 million packs of cigarettes are sold. In order
to recover some of the health care costs associated with smoking, the government
imposes a tax of $2 per pack. This will raise the equilibrium price to $5 per pack
and reduce the equilibrium quantity to 30 million packs.
The economist working for the tobacco lobby claims that this tax will reduce
consumer surplus for smokers by $40 million per day, since 40 million packs
now cost $1 more per pack. The economist working for the lobby for sufferers
of second-hand smoke argues that this is an enormous overestimate and that
the reduction in consumer surplus will be only $30 million per day, since after
the imposition of the tax only 30 million packs of cigarettes will be bought and
each of these packs will now cost $1 more. They are both wrong. Why?
Están equivocados ambos porque las perdidas para el consumidor no están
determinadas por la cantidad vendida ni el valor pagado en exceso sino
más bien por las ventas que dejaron de realizarse debido al impuesto.
Es decir 10 millones menos de packs por día.
5. Assume that the demand for gasoline is inelastic and supply is relatively elastic. The
government imposes a sales tax on gasoline. The tax revenue is used to fund
research into clean fuel alternatives to gasoline, which will improve the air we all
breathe.
a. Who bears more of the burden of this tax, consumers or producers? Show in a
diagram who bears how much of the burden.
Recae la mayor carga sobre los consumidores.
6. Assess the following four tax policies in terms of the benefits principle versus the
ability-to-pay principle.
a. A tax on gasoline that finances maintenance of state roads
Ya que los conductores son los que se benefician del buen estado y
seguridad de las carreteras este impuesto cumple con el principio de
los beneficios. Pero dado que el impuesto en la gasolina no depende
de la capacidad de pago este impuesto no cumple con el principio de
la habilidad para pagar.
Chapter 8
7. Both Canada and the United States produce lumber and footballs with constant
opportunity costs. The United States can produce either 10 tons of lumber and no
footballs, or 1,000 footballs and no lumber, or any combination in between. Canada
can produce either 8 tons of lumber and no footballs, or 400 footballs and no
lumber, or any combination in between.
a. Draw the U.S. and Canadian production possibility frontiers in two separate
diagrams, with footballs on the horizontal axis and lumber on the vertical
axis.
b. In autarky, if the United States wants to consume 500 footballs, how much
lumber can it consume at most? Label this point A in your diagram.
Similarly, if Canada wants to consume 1 ton of lumber, how many footballs
can it consume in autarky? Label this point C in your diagram.
Si EEUU consume 500 balones de football; puede consumir 5 toneladas de
madera. Si Canada por su parte quiere consumir 1 tonelada de madera
podrá consumir 350 balones de football.
e. How many footballs does the United States produce? How much lumber does
Canada produce?
EEUU producirá 900 balones de football. Canada va a producir 8 toneladas
de madera.
f. Is it possible for the United States to consume 500 footballs and 7 tons of
lumber? Label this point B in your diagram. Is it possible for Canada at the
same time to consume 500 footballs and 1 ton of lumber? Label this point D
in your diagram.
Si es posible. EEUU produciría 1.000 balones de football; 500 para el
consumo interno y 500 para el consumo de Canada. Y Canada
produciría las 8 toneladas de madera; 1 tonelada para el consumo
interno y 7 toneladas para el consumo de EEUU.
8. Shoes are labor-intensive and satellites are capital intensive to produce. The United
States has abundant capital. China has abundant labor. According to the
Heckscher–Ohlin model, which good will China export? Which good will the United
States export? In the United States, what will happen to the price of labor (the
wage) and to the price of capital?
China exportará zapatos y EEUU exportará satélites. En EEUU el precio de la
mano de obra bajará y el valor del capital se incrementará.
9. The accompanying table shows the U.S. domestic demand schedule and domestic
supply schedule for oranges. Suppose that the world price of oranges is $0.30 per
orange.
a. Draw the U.S. domestic supply curve and domestic demand curve.
b. With free trade, how many oranges will the United States import or export?
Suppose that the U.S. government imposes a tariff on oranges of $0.20 per
orange.
EEUU importaria 12 naranjas.
c. How many oranges will the United States import or export after introduction of
the tariff?
EEUU importaria 6 naranjas.
d. In your diagram, shade the gain or loss to the economy as a whole from the
introduction of this tariff.
10. In World Trade Organization (WTO) negotiations, if a country agrees to reduce trade
barriers (tariffs or quotas), it usually refers to this as a concession to other
countries. Do you think that this terminology is appropriate?
No lo creo. Eliminar las barreras comerciales entre países en mi concepto
siempre estimula el crecimiento económico y genera un mayor nivel de
bienestar a la sociedad.