14. 15. Suppose a tax of $4 per unit is imposed on a good. The supply curve and the demand curve are straight lines. The tax decreases consumer surplus by $10 and it decreases producer surplus by $10. The tax revenue is $160. From this information it follows that the tax decreased the equilibrium quantity of the good O from 80 to 70. O from 70 to 60. O from 75 to 55. O from 50 to 40. O from 20 to 15. O from 15 to 10. O from 45 to 30. O None of the above. Mark each of the following statements that are true. A tax that has no deadweight loss cannot raise any revenue for the government. A tax that raises no revenue for the government cannot have any deadweight loss. other things equal, a tax on an inelastic good will raise more revenue than an elastic good. None of the above are true

14. 15. Suppose a tax of $4 per unit is imposed on a good. The supply curve and the demand curve are straight lines. The tax decreases consumer surplus by $10 and it decreases producer surplus by $10. The tax revenue is $160. From this information it follows that the tax decreased the equilibrium quantity of the good O from 80 to 70. O from 70 to 60. O from 75 to 55. O from 50 to 40. O from 20 to 15. O from 15 to 10. O from 45 to 30. O None of the above. Mark each of the following statements that are true. A tax that has no deadweight loss cannot raise any revenue for the government. A tax that raises no revenue for the government cannot have any deadweight loss. other things equal, a tax on an inelastic good will raise more revenue than an elastic good. None of the above are true

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The figure below illustrates the effect of an excise tax (per unit tax) imposed on sellers (S means supply and D means demand). What is the value of the tax and how much tax revenue does it generate? Price S+tax $100 $60 $50 50 60 Quantity O a. $100 and $1000. O b. $50 and $3000. Oc. None of the alternatives is correct. O d. $50 and $2500. O e. $100 and $5000.
7. Effect of a tax on buyers and sellers 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 (Dollars per case) 200 100 140 140 120 400 40 411 20 11 Demand 40 20 Tax Wedge Supply 20 30 411 30 4 19 NO QUANTITY (Cases of craft beer) 100
Question 20 Assume that for good X the supply curve for a good is a typical, upward-sloping straight line, and the demand curve is a typical downward-sloping straight line. If the good is taxed, and the tax is tripled, the O base of the triangle that represents the deadweight loss triples. O height of the triangle that represents the deadweight loss triples. O All of the above are correct. O deadweight loss of the tax increases by a factor of nine.
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Consumer and Producer surplus Stax P $100 $70 $50 $45 $X $5 D 40 60 Assume an excise tax that has caused a decrease in Supply as shown on the graph above Show all work. а. How much is the tax per- unit b. How much is the value of X (intercept of the green line). How do you describe what that value is? C. How much is the consumer surplus before the tax? d. How much is producer surplus before the tax? е. How much is the consumer surplus after the tax? f. How much is producer surplus after the tax? g. How much is the deadweight loss as a result of the tax
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5. Calculating tax incidence Suppose that the local government of Raleigh decides to institute a tax on soda producers. Before the tax, 25 million liters of soda were sold every month at a price of $11 per liter. After the tax, 19 million liters of soda are sold every month; consumers pay $16 per liter, and producers receive $7 per liter (after paying the tax). The amount of the tax on a liter of soda is 3 that falls on producers is 5 per liter. O True per liter. Of this amount, the burden that falls on consumers is True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers. False per liter, and the burden
Cars D Suppose that your city puts an excise tax on cars but collects the tax from car buyers rather than from car sellers. Each buyer has to pay the tax when the car is registered. What would the likely effect be in the market for cars shown above? Select one: O a. S would shift to the right. Ob.S would shift to the left. O c. D would shift to the left. O d. D would shift to the right. Check Next page
QUESTION 2 Andrea is willing to pay a maximum of $1000 for a 50 inches television. She was able to order the television online and earned a consumer surplus of 300. How much she would have paid for that TV? O a. $1,300. O b.$700. O. $300. O d. $1,000. QUESTION 3 In normal circumstances if the government doubles the tax on a product then the resulting deadweight loss will be O a. four times the previous deadweight loss. O b. double of the previous deadweight loss. O c. equals to the previous deadweight loss. O d. less than previous deadweight loss.
7.7 pleaase explain
7. Effect of a tax on buyers and sellers The following graph shows the weekly market for handbags in some hypothetical economy. Suppose the government levies a tax of $46.40 per bag. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE (Dollars per bag) 200 823953 2 2 2 2 160 100 140 120 100 o 0 50 Tax Wedge Supply Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Bags of handbags) ?