(ii) Suppose that the income tax was changed, so that the marginal tax rate was constant, at thirty percent, but the first $10,000 of each person's income was exempt from the tax. Would the income tax then be regressive, proportional, or progressive? Explain briefly.

(iii) The demand curve for some commodity has the equation Q^D = 30-p^G, where Q^D is the quantity demanded, and p_G the price ( in cents ) paid by consumers. The commodity is provided in perfectly competitive markets. Its supply curve has the equation Q^S = 2p_N, where Q^S is the quantity supplied, and p_N the price ( in cents ) received by suppliers. What is the incidence of a tax of 6 cents per unit on this commodity?

(iv) Suppose that the government provides a subsidy of ten cents a unit to suppliers of some commodity. The commodity is produced by a constant-returns-to-scale technology, with marginal cost of ten cents per unit. Demand for the commodity obeys the equation Q^D = 60-p^D, where Q^D is quantity demanded, and p^D is the price actually paid by demanders. Would more of the subsidy be passed forward to demanders if the commodity were provided by a ( single-price ) monopoly, or by a perfectly competitive industry?

(v) Suppose that a tax is levied on the use of some input in one particular industry ( but not in any other industries ). If all industries were competitive, would the equilibrium allocation ( when this tax is levied ) be efficient? Explain briefly.

(vi) Explain briefly what is meant by the equivalence of consumption and wage taxes.

(vii) Suppose that a person consumed some positive amount of a commodity, but chose not to consume the commodity at all when an excise tax imposed on it raised its price significantly. Does this tax impose any deadweight loss on the person? Explain briefly.