Question : Article Summary In 2012, Colorado and Washington legalized marijuana for recreational : 1388031

 

Article Summary

In 2012, Colorado and Washington legalized marijuana for recreational use, and one of the major selling points in each state’s pro-marijuana campaign was the possibility of generating millions of dollars in tax revenue from sales which could be used for funding general education. The Colorado legislature was weighing a proposal to tax marijuana at 30 percent, of which 15 percent would be a sales tax on consumers and 15 percent an excise tax on growers. Washington has set a tax rate of 44 percent on consumers and 25 percent each for growers and retailers. Since the legalization of marijuana is relatively new, projecting the economic impact of its sale is difficult, leading to many questions as to the quantities that will be produced and sold and what actual tax revenues will be generated.

 

Source: Elizabeth Dwoskin, “Colorado and Washington Try to Figure Out How to Tax Marijuana,” Bloomberg Businessweek, April 26, 2013.

 

32) Refer to the Article Summary. Colorado is weighing a proposal to tax marijuana at 30 percent, of which 15 percent would be a sales tax on consumers and 15 percent would be an excise tax on growers. Does this necessarily mean that each group will bear half the burden of the tax?

A) Yes, since the taxes are divided equally between consumers and producers, each will bear half the burden.

B) Yes, despite the even split of the 30 percent tax, consumers and producers always bear equal burdens of a tax.

C) No, the burden of a tax is always 100 percent on the consumer.

D) No, the burden of the tax will depend on the elasticity of demand and supply.

 

33) Refer to the Article Summary. Colorado is weighing a proposal to tax marijuana at 30 percent, of which 15 percent would be a sales tax on consumers and 15 percent would be an excise tax on growers. Suppose the actual burden of the tax falls 80 percent on consumers and 20 percent on producers. In this case, consumers will actually bear the tax burden of ________ percent of the selling price and producers will actually bear the tax burden of ________ percent of the selling price.

A) 24; 6

B) 50; 50

C) 15; 15

D) 80; 20

 

 

34) If the government wants to minimize the welfare loss of a tax, it should tax goods with more inelastic demands or supplies.

 

 

35) For a given supply curve, the deadweight loss from the imposition of a tax is smaller if demand is more elastic.

 

 

36) The actual division of a tax between buyers and sellers in a market is the excess burden of the tax.

 

37) The person or firm that pays a tax bears the burden of the tax.

 

 

38) When the demand for a product is less elastic than the supply, consumers pay the majority of the tax on the product.

 

 

39) Explain the effect of price elasticities of supply and demand on tax incidence.

 

 

40) If the government is most interested in minimizing excess burden of an excise tax, should it impose the tax on goods that are elastic or on goods that are inelastic?

 

 

41) What is meant by “tax incidence”?

 

 

 

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more