1. Understanding the implications of taxes on welfareThe following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-taxequilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario.PRICE (Dollars per pinckney)7.005.003.00DemandABODEFSupply12QUANTITY (Pinckneys)? Complete the following table, given the information presented on the graph.ResultPrice producers receive before taxEquilibrium quantity after taxPer-unit tax$ValueIn the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply.ConceptA BFTax revenue after the tax is imposedProducer surplus before the tax is imposedConsumer surplus after the tax is imposedUсUDEU

A tax is a financial charge levied on an economic activity such as the production or consumption of…

1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenar PRICE (Dollars per pinckney) 7.00 5.00 3.00 Demand A B 00 DE F 8 Supply QUANTITY (Pinckneys) (?)

1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenar PRICE (Dollars per pinckney) 7.00 5.00 3.00 Demand A B 00 DE F 8 Supply QUANTITY (Pinckneys) (?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Understanding the implications of taxes on welfare
The following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax
equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario.
PRICE (Dollars per pinckney)
7.00
5.00
3.00
Demand
A
B
O
DE
F
Supply
12
QUANTITY (Pinckneys)
?

Complete the following table, given the information presented on the graph.
Result
Price producers receive before tax
Equilibrium quantity after tax
Per-unit tax
$
Value
In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply.
Concept
A B
F
Tax revenue after the tax is imposed
Producer surplus before the tax is imposed
Consumer surplus after the tax is imposed
U
с
U
D
E
U

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1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for Pinckney (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per Pinckney)QUANTITY (Pinckney's)DemandSupplyABCDEF9.00187.0011.0014 Complete the following table, given the information presented on the graph. Result Value Equilibrium quantity after tax Price consumers pay after-tax Per unit tax In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept A B C D E F Consumer surplus after the tax is imposed Producer surplus before the tax is imposed Tax revenue after the tax is imposed
point(s) possible Submit Next question The graph shows the market for basketballs, when sellers are taxed $6 a ball. Price (dollars per ball) 27 What is the excess burden of the tax? 25- Is the demand for basketballs or the supply of basketballs more inelastic? $+tax 23- 21- 19- Draw a shape that shows the excess burden of the tax on basketballs. 17+16 15 15- AS The excess burden of the tax on basketballs is $ million. 13- D The supply of basketballs is more than the demand for basketballs, and 11-T0 the pays most of the tax. SS 9- O A. inelastic; seller 7- 12 O B. inelastic; buyer 5+ 16 12 Quantity (millions of balls) 8. C. elastic; buyer D. elastic: seller >> Draw only the objects specified in the question. its O Time Remaining: 00:53:44 Next mpleted his course (ECON202 s2022 online) is based on Bade/Parkin: Foundations of Microeconomics, 9e MacBook Pro O O O O
According to Graph 8-1, after the tax is levied, producer surplus is represented by area:
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1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) Demand Supply A 56.00 40.00 B DE 24.00 F QUANTITY (Blinkies) Complete the following table, given the information presented on the graph. Result Per-unit tax Value Price producers receive after tax Equilibrium quantity before tax (?) In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept Producer surplus before the tax is imposed Deadweight loss after the tax is imposed Consumer surplus after the tax is imposed A B C D E F ☐ ☐ ☐
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1. What is the equilibrium price and quantity? 2. Suppose the government imposes a tax of $1.00 on each water bottle. Complete the column showing quantity supplied after the tax. (Hint: at a price of $8.00 the quantity supplied was 36000. With the tax, this quantity supplied will be supplied only at a price of $9.00, so the Quantity supplied with a tax at 9.00 is 36000) You continue, so at $8.50, the producer only gets 7.50. so is only willing to offer 32000 units. Qd Price 000s) $9.00 20 8.50 8.00 7.50 7.00 6.50 6.00 24 28 32 36 40 44 Qs (000s) 44 40 38 32 28 24 20 Quantity supplied after tax Qs(t) (000s) 36 32 Price 28 24 3. On your graph, plot the new supply curve after the imposition of the tax (in a different colour, to differentiate the supply curve). 4. What will be the new equilibrium price and quantity? 5. How much of the tax is passed onto the consumers in the form of price increase, and how much is paid by the producers? Indicate the producer and consumer burden on your…
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