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A Tax on Mobile Home Pads The residents of mobile home parks own their dwellings and rent pads (the land under the mobile home) from landowners. In Padville, all land is initially occupied by mobile homes, and each resident rents one padacre (a standard pad). Each landowner owns one padacre. Initially, there are 100 residents, and the price of land is $200 per padacre. Suppose the city imposes a tax of $40 per padacre, regardless of how the land is used. The tax is paid, in legal terms, by the land user (the resident). a. Use a supply/demand graph to illustrate the effects of the tax on the land market. b. The land tax will [increase, decrease, not change] the amount paid by a resident to a landowner and will [increase, decrease, not change] the net cost of land to a resident, defi ned as the amount paid to the landowner plus the $40 tax. c. The land tax will [increase, decrease, not change] the income of landowners. d. The tax is paid in economic terms, by [residents, landowners]. This is consistent with the _____ principle in an earlier chapter.
Chapter 17, Problem 1(choose chapter or problem)
A Tax on Mobile Home Pads
The residents of mobile home parks own their dwellings and rent pads (the land under the mobile home) from landowners. In Padville, all land is initially occupied by mobile homes, and each resident rents one padacre (a standard pad). Each landowner owns one padacre. Initially, there are 100 residents, and the price of land is $200 per padacre. Suppose the city imposes a tax of $40 per padacre, regardless of how the land is used. The tax is paid, in legal terms, by the land user (the resident).
a. Use a supply/demand graph to illustrate the effects of the tax on the land market.
b. The land tax will [increase, decrease, not change] the amount paid by a resident to a landowner and will [increase, decrease, not change] the net cost of land to a resident, defined as the amount paid to the landowner plus the $40 tax.
c. The land tax will [increase, decrease, not change] the income of landowners.
d. The tax is paid in economic terms, by [residents, landowners]. This is consistent with the _____ principle in an earlier chapter.
Questions & Answers
QUESTION:
A Tax on Mobile Home Pads
The residents of mobile home parks own their dwellings and rent pads (the land under the mobile home) from landowners. In Padville, all land is initially occupied by mobile homes, and each resident rents one padacre (a standard pad). Each landowner owns one padacre. Initially, there are 100 residents, and the price of land is $200 per padacre. Suppose the city imposes a tax of $40 per padacre, regardless of how the land is used. The tax is paid, in legal terms, by the land user (the resident).
a. Use a supply/demand graph to illustrate the effects of the tax on the land market.
b. The land tax will [increase, decrease, not change] the amount paid by a resident to a landowner and will [increase, decrease, not change] the net cost of land to a resident, defined as the amount paid to the landowner plus the $40 tax.
c. The land tax will [increase, decrease, not change] the income of landowners.
d. The tax is paid in economic terms, by [residents, landowners]. This is consistent with the _____ principle in an earlier chapter.
ANSWER:Step 1 of 5
Given data:
A Tax on Mobile Home Pads The residents of mobile home parks own their dwellings and rent pads (the land under the mobile home) from landowners. In Padville, all land is initially occupied by mobile homes, and each resident rents one padacre (a standard pad). Each landowner owns one padacre. Initially, there are 100 residents, and the price of land is $200 per padacre. Suppose the city imposes a tax of $40 per padacre, regardless of how the land is used. The tax is paid, in legal terms, by the land user (the resident).