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

Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781305971509

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Costs Of Taxation

Section: Chapter Questions

Problem 4CQQ

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Suppose the government places a tax on a product. How does the cost of the tax compare with the revenue raised? The cost of the tax to buyers and sellers is less than the revenue raised from the tax by the government. O Without additional information, such as the elasticity of demand for this product, it is impossible to compare tax cost with tax revenue. The loss of surplus to buyers and sellers exceeds the revenue raised from the tax by the government. The cost of the tax to buyers and sellers equals the revenue raised from the tax by the government.
QUESTION 6 Suppose a tax of $4 per unit is imposed on a good, and the tax causes the equilibrium quantity of the good to decrease from 2,000 units to 1,800 units. The tax decreases consumer surplus by $5,000 and decreases producer surplus by $3,400. The deadweight loss of the tax is Oa $1,200. Ob. S800. OC $1,600. Od. $2,200.
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.
Question 16 Figure #3: The graph below represents a $10 per unit tax on a good then the amount bought and sold in the market is only 4 units. Note that Q represents quantity and P represents price. P 24 20 A. 16 Supply B. 12 GIH 4 M Demand 2 4. 10 12 14 16 Refer to Figure #3. Before the tax goes into effect, what is (or are) the area(s) representing the consumer surplus? O A O B+C O A+B+C O A+B+D +J + K
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?
The equilibrium price of a good is $30. Supply of this good is more elastic than demand. 5uppase the government introduces a tax on the good. in this case, the price receved by producers is $24, and the price paid by consumers is 1.6 times more.Calculate the tax cost per good for the group bearing most of the tax burden if necessary, round any intermediate calculations and your final answer to two decimal places. $______
a. The market demand and supply functions for VCR movie rentals are:QD=10-0.04P and QS=3.8P+4.Suppose that VCR movie rentals are taxed at $0.25 per unit. Calculate:i. the equilibrium quantity and price, point elasticity of demand in equilibrium andproducer surplus without tax.ii. the revenues generated by the tax, the loss in producer surplus and percentageof the burden of the tax falls on producers?b. Determine the "rule-of-thumb" price when the monopolist has a marginal cost of $25and the price elasticity of demand of -3.0.
The accompnying graph depicts the market for socks. Adjust the graph to demonstrate what happens if the government imposes a $2.00/pair tax on poducers Market for socks 10 What is the new equilibrium quantity? 8: 7 12 pairs 6 What is the new equilibrium price? 4 6 What is deadweight loss created by the tax? 0 0 3 6 9 12 15 18 21 24 27 30 Quantity (pairs of socks) What is the government tax revenue? O rt (ed s) aou