ECO100 Assign4 - James E. Pesando Economics 100 Assignment...

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James E. Pesando Economics 100 Assignment # 4 Applications of Demand and Supply; Consumer Demand Theory 1. A 10 percent tax imposed on the sellers of milk, beer, wheat bread, and meat resulted in the following price increases. The supply curves for all of these goods have the usual positive slope. ____________________________________________ Good Milk Beer Wheat Bread Meat_ Price Change +9% +5% +1% +0% (a) Which good has the most inelastic demand curve? The most elastic demand curve? (b) For which good is the largest portion of the tax paid by sellers? Why? (c) If the demand curve for beer were perfectly inelastic, what would be the increase in the price of beer? 2. There is an active debate in Canada about the desirability of reducing employment insurance premiums, which are paid by both employers and employees. Economic studies have shown that the supply of labour in Canada is quite inelastic with regard to the wage rate (the “price” of labour). For the purpose of answering this question, assume that the supply of labour is
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ECO100 Assign4 - James E. Pesando Economics 100 Assignment...

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