1. The equilibrium price before the tax. $ 2. The price that buyers effectively pay after the tax. $ 3. The price that sellers effectively receive after the tax. 4. The incidence of the tax on buyers is. $ 5. The incidence of the tax on sellers is. $ 6. Deadweight Loss of the Tax (calculated as the area of loss) Area of a triangle (Base x Height) =

1. The equilibrium price before the tax. $ 2. The price that buyers effectively pay after the tax. $ 3. The price that sellers effectively receive after the tax. 4. The incidence of the tax on buyers is. $ 5. The incidence of the tax on sellers is. $ 6. Deadweight Loss of the Tax (calculated as the area of loss) Area of a triangle (Base x Height) =

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 10PA

See similar textbooks

Similar questions

In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?
Had the demand for pumpkins been perfectly inelastic at Point. A, the price elasticity of demand for pumpkins from the equilibrium point before the imposition of the tax to the equilibrium point after the imposition of the tax would be. A1 B.0 C-1 D. infinity. Price ($) 8.50 7.25 5.50 0 B 700 1.200 Supply 2 Supply 1 Demand Quantity of pumpkins
2. The elasticity of demand for guitars is -2.0, and the elasticity of supply is 3.0. How much will the price of guitars change with a per-unit tax of $2?
Suppose that the Australian government imposes a sales tax on a product and both buyers and sellers share the burden of the If the price elasticity of demand for the product is perfectly inelastic. Which of the following is true? Select one: a. Sellers would pay more of the tax than buyers. b. Buyers would pay all of the tax. c. Buyers and sellers would share the tax burden equally. d. Sellers would pay all the tax.
Price Supply P3 P2 P1 H. Demand 0 Q1 Q2 Quantity Refer to the figure above. Suppose the government imposes a tax of P3 - P1. The area measured by G represents the burden of the tax on producers. the deadweight loss experienced by producers. the burden of the tax on consumers. the deadweight loss experienced by consumers.
PRICE (Dollars per pack) 50 45 TAX REVENUE (Dollars) 40 35 30 25 400 360 320 At this tax amount, the equilibrium quantity of cigarettes is government collects $ in tax revenue. 280 240 0 Suppose the government imposes a $10-per-pack tax on suppliers. 200 160 120 0 5 80 40 Supply Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per pack. (Hint: To find the equilibrium quantity after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using the green points (triangle symbol) to plot total tax revenue at each of those tax levels. 0 Demand Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 10 15 20 25 30 35 40 45 50 QUANTITY (Packs) 5 True O False Graph Input Tool Market for Cigarettes Quantity (Packs) 10 15 20 25 30 TAX (Dollars per pack) Demand Price (Dollars per pack) Tax…
The market demand is Qd=12 - 0.04P The market supply is Qs=3.8P + 4 Questions: 1) Calculate the equilibrium qty and price 2) Calculate the elasticity of demand at equilibrium point Supposed each unit is taxed $0.25: 3a) calculate the revenue generated by tax 3b) calculate loss in consumer surplus and the percentage of the burden of the tax paid by consumers. 3c) calculate loss in producer surplus and the percentage of the burden of the tax paid by producers.
How would I calculate a dead weight loss for a tax of $3 using this graph?
owing graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax ium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) Indicate the after-tax scenario. Demand Supply 6.50 - B. 5.00 3.50 - E QUANTITY (Pinckneys) Complete the following table, given the information presented on the graph. Result Value Equilibrium quantity before tax Per-unit tax Price consumers pay after tax In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept B F Consumer surplus after the tax is imposed Producer surplus after the tax is imposed Deadweight loss after the tax is imposed PRICE (Dolars per pinckney)
6a. In a market where the supply curve is inelastic, how does an excise tax affect the price paid by consumers and the quantity exchanged?
Price $3.50 3 2.50 $0.25 $1.00 1,200 1,500 $0.50 Supply The figure above illustrates a market for gasoline with a $1 tax imposed on the buyers. What is the seller's tax incidence? Between $0.00 and $1.00 depending on elasticity of supply. Demand Demand + $1 tax Quantity
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 Some economists believe that a sales tax, in general, is undesirable. Explain. Despite this, why do most countries still impose a tax on cigarette? Explain plausible arguments.