1. In the market for steel pots for boiling water, the supply curve is the typical upward-slopingstraight line, and the demand curve is the typical downward-sloping straight line. The equilibriumquantity in the market for steel pots is 200 per month when there is no tax. The governmentimposes a tax of Rs.5 per steel vessel. As a result, the government is able to raise Rs.800 per monthin tax revenue.a. Please, specify new equilibrium quantity of steel pots (after tax)b. Draw a graph to show the new and old equilibrium quantity and the tax revenue (before andafter-tax)C. Suppose you are told that the equilibrium price was Rs.100 when the tax was not imposed. Withthe tax now the buyer pays Rs.103 and the seller receives Rs.98. What is the loss in consumer andproducer surplus? Show it on the graph.d. What is the loss in welfare? Explain.e You advise the government that instead of a tax on steel pots they should impose the tax on thesteel industry to minimize the welfare loss. Given that the supply of steel is more inelastic than thesupply of steel pots, should the government listen to you. Explain. You can use graph(s) to help withyour explanation. 4. Supratim costlessly invents a chemical for hair transplant and since no one else knows the methodof preparing the chemical, he reserves the right of being the only seller of the chemical in themarket. Supratim has 0 economic cost of producing any quantity of the chemical. He faces adownward sloping demand curve for the chemical (lower the price higher the quantity demanded).i, Show the profit eamed by the monopolist in a graph. given that MC=AVC=AC=0ii. Supratim soon realizes that he can get to know a person's willingness to pay. Will he want tocharge the same price from all buyers? Explain.b. The government asks Supratim to reveal his secret formula and hence many sellers can potentiallyenter the market. Also assume that due to some input market change, now the average cost ofproducing the chemical is U-shaped. Customers however have preference for variety: colour of thechemical, whether the chemical is in powder or liquid form, the name of the product, etc.

Hello. Since you have posted multiple parts of the question and not specified which part of the…

1. In the market for steel pots for boiling water, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for steel pots is 200 per month when there is no tax. The government imposes a tax of Rs.5 per steel vessel. As a result, the government is able to raise Rs.800 per month in tax revenue. a. Please, specify new equilibrium quantity of steel pots (after tax) b. Draw a graph to show the new and old equilibrium quantity and the tax revenue (before and after-tax) c. Suppose you are told that the equilibrium price was Rs.100 when the tax was not imposed. With the tax now the buyer pays Rs. 103 and the seller receives Rs.98. What is the loss in consumer and producer surplus? Show it on the graph.

1. In the market for steel pots for boiling water, the supply curve is the typical upward-sloping straight line, and the demand curve is the typical downward-sloping straight line. The equilibrium quantity in the market for steel pots is 200 per month when there is no tax. The government imposes a tax of Rs.5 per steel vessel. As a result, the government is able to raise Rs.800 per month in tax revenue. a. Please, specify new equilibrium quantity of steel pots (after tax) b. Draw a graph to show the new and old equilibrium quantity and the tax revenue (before and after-tax) c. Suppose you are told that the equilibrium price was Rs.100 when the tax was not imposed. With the tax now the buyer pays Rs. 103 and the seller receives Rs.98. What is the loss in consumer and producer surplus? Show it on the graph.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The figure below represents the market for Gasoline, where initially the equilibrium price was $5.60. The picture shows the effect of a $1.50 tax on gasoline. Using the information from the figure, what is the price elasticity of demand(Using the Midpoint method) when moving from equilibrium to the new demand after the tax?(Input the answer in absolute value and round it to 2 decimal places)
Consider the graph at right. Assume that before any tax, firms were willing to supply 5 thousand pounds of lobster at a price of $50 per pound. Use the line drawing tool to draw a new supply curve reflecting a $30 per pound tax. Label this line 'STaxı Carefully follow the instructions above, and only draw the required object. (Enter all responses as whole numbers) The new price consumers will pay is $65 and the new price producers will receive is $ C Price 100- 95- 90- 85- 80- 75- 70- 65- 60- 55- 50- 45- 40- 35- 30- 25- 20- 15- 10- 5- -O 2 STax 3 4 5 6 Quantity (thousands) -∞ 8 S D 9
Consider the graph at right. Assume that before any tax, firms were willing to supply 5 thousand pounds of lobster at a price of $50 per pound. Use the line drawing tool to draw a new supply curve reflecting a $20 per pound tax. Label this line 'S Taxi Carefully follow the instructions above, and only draw the required object. (Enter all responses as whole numbers) The new price consumers will pay is $ and ……… Price 100- 95- 90- 85- 80+ 75- 70+ 65- 60- 55- 50+ 45- +3828== 40+ 35- 30- 25- 20+ dit 154 104 5- d 0- 0 1 2 7 3 4 5 6 Quantity (thousands) STax -00 8 S D Fox 9
If the government provides a subsidy to the producers of coffee and simultaneously charges a tax on tea, which of the following can (but not necessarily wilI) happen in the market for coffee? * O The equilibrium price and quantity both decrease. O The equilibrium price increases and the equilibrium quantity decreases. O The equilibrium price stays the same and equilibrium quantity decreases. The equilibrium price stays the same and equilibrium quantity increases. O The equilibrium price decreases and the quantity stays the same. Income elasticity measures the responsiveness of changes in income to changes in price. changes in quantity demanded to a change in income. changes in quantity demanded to a change in price. changes in income to changes in supply. O All of the above.
do fast.
8. U.S. government price supports for milk led to an unceasing surplus of milk. In an effort to reduce the surplus about a decade ago, Congress offered to pay dairy farmers to slaughter cows. Use two graphs, one for the milk market and one for the meat market, to illustrate how this policy should have affected the price of meat. (Assume that meat is sold in an unregulated market.) Be sure to draw the inverse demand and supply curves and label your axes. Explain clearly.
Question 11 of 26 > O Macmillan Learning The graphs show the market for bags of potato chips, which is currently at an equilibrium price of $1.33 per bag and an equilibrium quantity of 5.33 million bags. Suppose that, in an attempt to lower blood pressure and reduce healthcare costs, the government imposes a $1.00 excise (or commodity) tax on potato chips. Suppose the government levies this tax on manufacturers for each bag of potato chips they produce. Please shift the appropriate curve or curves to illustrate this. Price ($ per bag) 5.0 4.5 4.0 3.5 3.0 2.0 What is the price paid per bag by consumers (Pc) with this new tax? Incorrect Attempt 2 2.5 Supply 1.5 1.0 10 0.5 De 0.0 0 1 2 3 4 5 6 7 8 9 10 Quantity (millions of bags) P = $ 2
The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the government levies a tax of $40.60 per case. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE (Dolars per case) 200 180 160 140 120 100 80 60 40 20 0 + Buyers Sellers Demand Before Tax After Tax Tax Wedge Supply 0 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Cases of craft beer) Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay (Cases of craft beer) (Dollars per case) Price Sellers Receive (Dollars per case) Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per case) Elasticity The tax burden…
4. In order to reduce farm output, raise farm prices, and thus raise farm incomes (revenues), the government pays farmers to set aside a portion of their land from production. Using a graph, explain in terms of the elasticity of demand for farm products why farmers may be better-off when harvests are low even if we ignore the money they receive from the set-aside program.
What is consumer surplus? How is it illustrated on a demand and supply diagram? please draw
Hand written solutions are strictly prohibited
Suppose a tax is levied in the market for soda. Consider a $0.50 excise tax on producers for each soda sold. The graph illustrates the demand and supply curves for soda both before and after the tax is levied. Use the graph below to answer the remaining parts of this question. SEE GRAPH d. What is the consumer surplus generated after the imposition of the tax? Shade in this area on the graph. Instructions: Use the tool provided “CStax” to illustrate this area on the graph. Consumer surplus after the imposition of the tax is $ _____ thousand. e. What is the producer surplus generated after the imposition of the tax? Shade in this area on the graph. Instructions: Use the tool provided “PStax” to illustrate this area on the graph. Producer surplus after the imposition of the tax is $ _____ thousand. f. What is the total revenue generated from the tax? Shade in this area on the graph. Instructions: Use the tool provided “TR” to illustrate this area on the graph. Tax…