Subsidy v. Tax

Related BrainMass Solutions

• Encouraging a Monopoly to Social Efficiency

  If government wanted to encourage a monopoly to produce the socially efficient quantity, should it use a per-unit tax or per-unit subsidy? Explain how this tax or subsidy would achieve the socially efficient level of output.

• Likely consequences of the tax subsidy plan

  179184 Likely consequences of the tax subsidy plan In 1990, Japan's Ministry of International Trade and Investment (MITI) proposed that firms be given a tax credit equal to 5% of the value of its increased imports.

• Consumer Surplus, Producer Surplus and Correcting for Spillover Costs or Externalities

  Show graphically how a tax can correct for a negative externality and how a subsidy to producers can correct for a positive externality. How does a subsidy to consumers differ from a subsidy to producers in correcting for a positive externality?

• Consumer Income

  Two alternative tax/subsidy schemes are determined.

• Econometrics, Regression, Tariffs

  (A subsidy is just a negative tax.) Why might the production subsidy result in higher welfare for the country than the tariff policy in part A? Explain clearly.

• federal tax exemption of interest on state-local debt

  18088 Federal income tax exemption - is it or is it not a an inefficient subsidy Is the federal income tax exemption of interest on state-local debt an inefficient subsidy in terms of "transfer efficiency"?

• Subsidy versus Tariff

  A tariff is a government-imposed tax on imports usually in order to protect domestic industries from imported goods.

• Governmental Impact

  are the winners as they will enjoy positive externalities and the losers are the residents of the developed areas of the town whose tax money will pay for the $300,000 subsidy. 3-explain what the city will have to give up because of the subsidy and

• The effect of subsidy

  The granting of a 50-cent-per-unit subsidy for each auto tire produced. Answer: The effect of subsidy is the opposite of tax effect that is cost /unit decreases and supply increases The effect of subsidy and other concepts are briefly illustrated.