StudentShare
Search
Free

# Effect of Tax on the Selling of Apples in a Small Scale - Assignment Example

Summary
The paper "Effect of Tax on the Selling of Apples in a Small Scale" describes that the experiment shows the addition of tax when demand is higher than supply, the price of the goods or services increases significantly. The shifts in demand and supply depend on whether the tax affects the supplier or the buyer…

## Extract of sample "Effect of Tax on the Selling of Apples in a Small Scale"

﻿Sales Tax Experiment #3
Section 1: Experiment set-up
This experiment has three sessions namely; session 1, session 2 and session 3. The experiment aims at showing the effect of tax on the selling of apples in a small scale. In this experiment, the participants are in two equal groups of buyers and sellers. The participants then involve in buying and selling of apples in the different sessions. The objective of this experiment is to find out the effect of tax on demand and supply of goods in the market.
In the first session, there is no tax imposed on the selling of apples. In the experiment, the market session 1, the apple supplier has a seller cost of \$18 for selling a bushel of apples. This scenario takes two rounds or instances of selling and the supplier’s interest are the amount of profit. According to the data, in round 1 the supplier sold a bushel of apples at \$10 and the second round at \$19. The formula to calculate profit is:
Profit = price paid – seller cost which is \$19 - \$18 = \$1 for the second round.
In the second set of data, session #1 has apples sold for every unit from 1 to 20. The indication is that the demand for the apples is high when there is no tax charged during the buying and selling of the apples. The demand of the apples in the experiment is less elastic than the supply.
In the second session, the supplier bears the tax burden. In the experiment, the apple supplier still has a seller cost of \$18 for a bushel of apples. Above the seller cost, the supplier must pay a sales tax of \$15. However, if the seller does not sell any apples, he does not pay either seller cost or sales tax. From the record of prices and profits, the supplier never sold a bushel of apples in either round 1 or 2 showing a significant decline in the profits to zero when the supplier pays the tax. From the second data set, session #2 indicates a drop in the supply of the apples. In the first 14 units sold, the sellers supply pattern indicates some increase in volumes of the sales of apple. On the other hand, from 15 to 20 units, the seller never sold any apples due to the high costs from taxes.
The tax burden shifts to buyers in the third session. The supplier of apples in the first set of data does not sell any apples due to drop in demand since the buyers deter from buying. In the second data set, the buyers could still afford the bushel of apples for up to 12 units sold. From 13 to 20 units, the supplier does not sell any apples.
Section 2: Economic theory and prediction of results
This experiment uses a method of comparative statistics to analyze the effect of tax on demand and supply. The economic theory that comes into play in this scenario is the optimal tax theory. This theory suggests the best way to effect taxation with minimal distortion of the demand and supply. According to this theory, sales tax imposed on suppliers and buyers has the same effect; reducing the demand and supply.
In conclusion, the experiment shows the addition of tax when demand is higher than supply, the price of the goods or services increases significantly. The shifts in demand and supply depend on whether the tax affects the supplier or the buyer.
Works cited.
Robin Bade and Michael Parki. Foundations of Microeconomics. Boston, MA : Pearson, 2011. print. Read More
Cite this document
• APA
• MLA
• CHICAGO
(“Effect of Tax on the Selling of Apples in a Small Scale Assignment”, n.d.)
(Effect of Tax on the Selling of Apples in a Small Scale Assignment)
https://studentshare.org/macro-microeconomics/1593017-microeconomics-experiment-number-3.
“Effect of Tax on the Selling of Apples in a Small Scale Assignment”, n.d. https://studentshare.org/macro-microeconomics/1593017-microeconomics-experiment-number-3.
Click to create a comment or rate a document

## CHECK THESE SAMPLES OF Effect of Tax on the Selling of Apples in a Small Scale

### Small Scale Digital Device Forensics Lab Project

...?30 January Small Scale Dgital Device Forensics Lab Project The German born American physicist who developed the theory of relativity, Albert Einstein in a famous quote once said “it’s appallingly obvious our technology has exceeded our humanity,” and indeed he predicted the future accordingly as his discoveries had paved the way for the development of science and into elevating mankind into greater heights that he would never had assumed. The advancement of science, research and through the indefatigable efforts of men, we have explored space, harnessed energy from the elements of nature, broken down matter, questioned astronomies, cracked geology, coined astounding hypothesis almost as good as solid ground theories; in light...
4 Pages(1000 words)Essay

### Small scale action research study

...?Running Head: SMALL SCALE ACTION RESEARCH STUDY Small Scale Action Research Study Insert Insert Grade Insert 29 January 30, 2011 Outline I. Introduction II. Literature Review: a. The Significance of Reading b. Parental Influence in Reading c. Interactions with Peers d. Reading programmes used by English Primary Schools Presently e. Summary and Research Significance III. Data Collection Method a. Main Aspects in a Questionnaire b. Questionnaire for 28 School Children c. Parents’ Questionnaire IV. Findings V. Analysis and Interpretation VI. Conclusion and Recommendations Small Scale Action Research Study I. Introduction This research study deals with how years 1 and 2 primary school children in my school approach reading; these children...
14 Pages(3500 words)Essay

### Small-scale research study

...?Small -Scale Research Study Introduction Primary research for this study was conducted by distributing survey questionnaires to 10 KS1 teachers (seeAppendix 1 for a copy of the questionnaire) who were teachers in the school where the researcher was doing her placement. Among the teachers in the school, they handled mathematics subjects and were adept in this area. These teachers were approached with a brief orientation about the study and when they agreed to participation, they were handed the questionnaires to complete. They were requested to return the questionnaires to the researcher upon completion. Since there were just a few teachers who taught mathematics in KS1, they were all recruited for the study, although three were unable...
6 Pages(1500 words)Essay

### A Small Scale Sample Survey

... hours a day, suggesting that they are heavily dependent on computers for the purposes previously indicated. Figure 4. Length of computer usage per day. Figure 5 shows that all the respondents use the computer at least two to three times a week, with 60% of the respondents actually using the computers everyday. Again, these figures indicate how much computers are a part of the life of Coventry University students. Figure 5. Frequency of computer usage Respondents were also asked how important were computers for them on a scale of 1 to 5, with 5 indicating the highest score. Calculations indicate that the mean score was 4.60, with a standard deviation of .50, indicating that Coventry University students consider computers as a very important...
8 Pages(2000 words)Coursework

### A Small Scale Sample Survey

... College: Topic: A small Scale Sample Survey Introduction The Sports Centre is supposed to be a Leisure establishment set up toprovide a quality sports as well as health and leisure experience in whichever activity an individual may decide to participate in. Many writers argue that the sports centre is supposed to be a major local centre for sport and leisure courses open to staff and students as well as the general public. According to Bowers (1970), the sports centre should run highly successful competitive teams in sports such as football, netball and basketball and other games such as Badminton, table tennis and martial arts, all open to both members and non-members. These activities should be divided into daytime activities for staff...
6 Pages(1500 words)Essay

### Small Scale Experimental Machine

...Small Scale Experimental Machine - "The Baby" by Insert Please Presented to '''''''''''' Insert the of School/College October 16, 2008 It was the 21st of June, 1948, when after several unsuccessful trials the first stored-program digital computer ran, and solved a mathematical problem, first. It was called Manchester Small-Scale Experimental Machine (SSEM), or The Baby - since it became a foundation for further research and development in the field, and created a ground for these familiar to everyone computers we know now. Its designers, Frederic Williams, Tom Kilburn and Geoff Tootill, who worked at the Electrical Engineering department of the University, developed the machine as a test-bed for Williams Tube - one of the created...
5 Pages(1250 words)Article

### Small Scale Industries

As an example consider the case of Jordan. The strength of SSI in Jordan was 84% of the total established industries during the period of 1990-1998 which escalated to almost 90% of the total industries during the period of1999-2006 (Hachure cited in Lozi, 2008).Contrary to this , the Mexican experience shows that only 70.000 projects go to the second year from 200,000 started annually. (Bencivenga, V. Bruce, S. and Starr, R. 1995).
Different countries have different ceiling of labor size for an industry to be labeled as small scale. For e. g. 15 workers in Iraq and Ghana, while Egypt, Belgium and Denmark have raised the ceiling for labor not exceeding 50 workers. In contrast , countries such as France and Italy adopted the...
10 Pages(2500 words)Essay

### A Small-Scale Empirical Study

... in the global scenario, it has been the enhanced profitability of certain specific industries that have drawn in FDI. The present research has been constrained in quite a few dimensions. First and foremost, the very small sample size should be mentioned. A larger number of sectors should be observed and while what has been found for India may still be valid, proving it with a larger sample in effect makes the proof robust. Another point that has to be borne in mind for further research pursuits in this direction is that for the true relative strength of sector specific factors compared to the financial and economic factors featured in any emerging economy in drawing in FDI flows to be perceived, similar comparative studies should...
4 Pages(1000 words)Essay

### Module 1 Small Scale Evaluative Study

... or otherwise. The other big issue with this is that the pupils need to be taught how to self evaluate themselves effectively. In this whole issue of pupils’ self evaluating themselves the teachers take the onus of ensuring that the process is as effecting as possible so as to produce the desired results. This is one of the major weaknesses affecting self evaluation in respect to pupils doing it themselves. The other important finding was that self evaluation was not a well embraced aspect by the various stakeholders. It is taken to be a burden to the time and resources of the school. This was noticed by the response rate of the questionnaires by the teachers. 38 percent of them did not return the questionnaires within the 24 hours given...
10 Pages(2500 words)Essay

### Small-scale research project

However, the researcher discovered that cervical cancer screening has been available in virtually all countries as part of primary care and family planning programs. Uganda was one country that introduced preventative health screening long ago. Nevertheless, after several years, cervical cancer remains the leading cause of death due to cancer among women 15 years of age and older and the mortality rate for this disease has been increasing (WHO/ICO, 2010). Robles (2000) suggested that an explanation for the problem lie in the concept of prevention; and for many women this concept may not be fully understood.
It became apparent and alarming to the researcher that the prevalence of cervical cancer in Uganda was high (WHO/ICO, 201...
6 Pages(1500 words)Outline

### Calculation of Income Tax

The calculations for the capital gains tax are shown in the appendix. From the calculations, it may be observed that it is advisable to sell off the business building before 05th April 2008 as you can avail of the indexation allowance and taper relief which are no more available. It may be noted that the indexation and taper relief are the allowanced granted by the government to provide for the increase in the asset value due to inflation (Chris Horne). In case you decide to sell the property after 05th April 2008 you may have to pay a higher CGT of 18,000. However in the case of the personal paintings since they have been acquired only in the year 2005 they do not stand eligible for any allowances and the capital gains will simpl...
6 Pages(1500 words)Case Study

### The Effect of Democracy on Chinese Development

Any country first needs to go through economic liberalization and political liberalization before finally settling into a stable democratic situation. Democracy should not at any one point be viewed as if it were socialism, but should be seen as a means of promoting economic development through accountability and protection of individual lawful rights and interests...accountability in the sense that the respective leaders are able to fight corruption, enhance social harmony, strengthen public trust and more importantly empower government institutions that are directly in touch with the people (Liu, 2008, p.1-2). Owing to the Chinese well informed and affluent society on top of having a very dynamic economy, the political change wh...
7 Pages(1750 words)Coursework

### The Effect of Truth on the Protagonist Survival

Solzhenitsyn, a Nobel Prize winner, had been a rather obscure and unpublished 43-year-old teacher in a high school, situated in a Russian town, Ryazan, but suddenly in 1962, burst into the literary scene with his groundbreaking novel “One Day in the Life of Ivan Denisovich” which made him an overnight literary sensation. Besides being both compelling as well as authoritative, the truth of Stalin’s barbaric camps forms the mainstay of this novel. Solzhenitsyn’s simple but yet blatantly truthful messages about the prevalent Russian politics are elegantly woven into the story that erupted a plethora of protest from all quarters of society. Many of Solzhenitsyn stories were written in the labor and prison...
7 Pages(1750 words)Case Study

### Marketing on a Global Scale

The evaluation of production, including techniques, material selection, and inventories, must be based on a cold look at market potential, for management faces the decision of making a considerable investment.
By assessing new or modified products that can be added by acquisition and internal development, product development becomes the lifeblood of global business. Decisions in the global area determine the products to be produced and stocked, as well as details concerning their appearance, form, size, package, quantities, the timing of production, price lines, and anticipated market segments. Product development on the global scale combines the scientists function of analyzing, classifying, and organizing information into c...
9 Pages(2250 words)Research Paper

### The Management, Leadership and Teamwork Competencies Required by a Small Business Owner

On the other hand organizational leadership is defined as the ability based on the specific skill of an individual to lead his/her subordinates in a manner that pre-planned organizational goals could be achieved within the defined time-frame.

According to Burns (1978) and Bass (1985), transformational leadership has a set of category constructs such as values, morals, farsightedness, long term goals, principles, acute awareness about the dividing line between causes and symptoms, mission statements, strategic perspectives, and human resources. Similarly, they identify a set of category constructs in the transactional leadership also. For instance concentration on the task at hand, short term goals and tactics, confusion co...
6 Pages(1500 words)Coursework

### Effect of Corporations Moving Jobs Overseas on the Economy

The issue comes into focus, whenever there are political, economic debates or talks about H1B visa limits. The economic slowdown has further led to the intensification of these debates. But, despite apprehensions from different quarters, neither the companies nor the government has said a final word on the trend. Increasing levels of competition amongst the corporate houses have been one of the key highlights of the globalization era. Be it the retail sector, the banking, the automobile, the IT-enabled services, the white goods space, etc. the companies have always been on the lookout for reaching out to more number of customers while doing everything possible to please the existing lot. Leveraging the economies of scale has prove...
8 Pages(2000 words)Coursework

### The Main Threat to Small Business

When it comes to reliability factor big businesses are able to sustain because of their track record. Big businesses are able to pacify their customers using their past successful track records.
Nowadays most of the business opportunities and orders are posted online. This means that business providers need to be well integrated with supplier systems through online facilities. The infrastructure of the business model needs to be updated. But this is not an easy task for small businesses. E-based procurement is possible only with a well-maintained network on the internet. This requires a lot of financial and technical necessities which could not be supported by small businesses. On the other hand, Big businesses are well equip...
8 Pages(2000 words)Assignment

The supercenters like Wal-Mart are recorded to have dropped the share of small businesses in almost all areas where they are operating (Stone, Artz, & Myle, pp.12 & 13).
It is a datum of experience that the major attribute of power bearing body is its transcendence in development as compared to its contemporaries. The same goes for the world of business too. According to the studies of Jane L. Parpart, Shirin M. Rai and Kathleen Staudt in ‘Rethinking empowerment, gender, and development’, the term ‘power’ has often been used as an alternative for the developmental approaches. Stated differently, the concept of power cannot be separated from development. According to Keith Rankin in ‘Globa...
6 Pages(1500 words)Essay

### Corporation Income Tax

Since the beginning of the 20th century, Antitrust Acts have been There are instances, however, that the income or gain out of the said sale or exchange or distribution may not be recognized as such income or gain for purposes of income taxation. One such example is in the case of a controlling corporation acquiring or buying the properties of the corporation that it controls upon the liquidation of the controlled or subsidiary corporation. For the said parent-subsidiary sale or exchange therefore, the general rule is that the gain is not recognized as taxable income. There are requirements to comply with as there are some exceptions.

Parent Corporation owns sixty percent (60 %) of the single class of stock of Subsidiar...
19 Pages(4750 words)Case Study

### EU Law: Direct Effect, Indirect Effect and State Liability

The doctrine of direct effect is a principle that has been by the European Court of Justice and not is the EC Treaty. The development of the doctrine was done in a series of judgments. The doctrine is simple terms means that subject to satisfaction of certain conditions, rights and obligations which are created by EC law, may be relied upon by individuals and can be enforced in their national courts.

The doctrine developed in Case 26/62 Van Gend en Loos v. Nederlandse Administratie der Belastingen2, the Court found that the Treaty was more than an international agreement; it introduced a ‘new legal order’, which had its own institutions as well as legislative powers, thereby granting rights and obligation...

9 Pages(2250 words)Assignment