ECONOMICS
SUPPLY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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to discourage consumption of those goods
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to ensure that the wealthy pay a share of taxes
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to protect newly forming industries from foreign competition
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to provide for the safety of the food supply
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Detailed explanation-1: -Governments use excise taxes to regulate and discourage consumption of these products, but also to generate revenue. Some states generate revenue from sales tax, which may be imposed on top of excise taxes for certain items.
Detailed explanation-2: -Definition: Customs Duty is a tax imposed on imports and exports of goods.
Detailed explanation-3: -Such taxes affect supply because it adds to the cost of production. Reduction in per unit tax levied by the government will decrease the cost of production and increase supply by the firms due to higher profit margins. In this case the supply curve will shift towards the right.
Detailed explanation-4: -Answer and Explanation: When a tax is imposed on the buyers of a good, the demand curve shifts downwards in respect to the amount of tax imposed, thus causing the equilibrium price and quantity of commodities demanded to reduce.
Detailed explanation-5: -An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to customs duties, charged on goods from outside the country). It is a tax on the production or sale of a good. This tax is now known as the Central Value Added Tax (CENVAT).