Done17. (Figure: Laffer Curve 3) A supply-side economist is advocating reducing income tax rates. She is probably assuming that the economy is at pointAverage Tax Rate(%)O d3bChapter 10 Part 2: Homework ProblemsCTax Revenues (millions of dollars)in the graph.1 match C

The Laffer curve is a theoretical relationship between tax rates and tax revenue. It is named after…

17. (Figure: Laffer Curve 3) A supply-side economist is advocating reducing income tax rates. She is probably assuming that the Average Tax Rate(%) 0000 b Tax Revenues (mons of dollars) homy is at point in the graph

17. (Figure: Laffer Curve 3) A supply-side economist is advocating reducing income tax rates. She is probably assuming that the Average Tax Rate(%) 0000 b Tax Revenues (mons of dollars) homy is at point in the graph

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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ut of 60 Submit All < Question 21 of 60 (Figure: Effects of Excise Tax) Based on the graph, after the excise tax is placed on the product, the producer surplus is + tax Do G. Do O CFD. ACFG. О ВЕFC. O АЕВ. Activate Windows Go to Seings t ateWzco m.
(Figure: The Market for Amazon Echo) Use Figure: The Market for Amazon Echo. The figure shows the pre-tax and post- tax positions neg S_{1} and S_{2} respectively-of the supply curve for the Amazon Echo. The tax revenue collected by the government is equal to:
6. Changes in taxes The following graph plots an aggregate demand curve. Using the graph, shift the aggregate demand curve to depict the impact that a tax hike has on the economy. PRICE LEVEL 130 120 110 g 100 90 80 Aggregate Demand 70 0 10 20 30 OUTPUT 40 50 60 Aggregate Demand (?) Suppose the governments of two very similar economies, economy Y and economy Z, implement a tax cut of equal size. The tax cut in economy Y is temporary, while the tax cut in economy Z is permanent. The economies are otherwise completely identical. The tax cut will have a smaller impact on aggregate demand in the economy with the
The graph above is for the market for broadband home internet. Currently the internet service providers are charging the monthly subscription price of $50. Calculate the total revenue at this price level. 5,000 $4,500 $2,500 $9,000
6. Changes in taxes The following graph shows the aggregate demand curve. Shift the aggregate demand curve on the graph to show the impact of a tax cut. PRICE LEVEL 130 120 110 100 90 80 70 0 10 20 30 OUTPUT Aggregate Demand 40 50 60 Aggregate Demand (2) Suppose the governments of two different economies, economy A and economy B, Implement a permanent tax cut of the same size. The marginal propensity to consume (MPC) in economy A is 0.7 and the MPC in economy B is 0.85. The economies are identical in all other respects. The tax cut will have a smaller impact on aggregate demand in the economy with the
li, GRAPH O SETTINGS Tax Burden of Reset ($) Price Tax imposed on: Supply Demand 90 $90.00 Excise Tox (0 - $20) 0.00 80 70 Demand Perfectly Inelastic Relatively Elastic 60 Relatively Elastic $50.00 40 Supply Less Elastic Perfectly Elastic 30 Perfectly Elastic 20 10 CALCULATIONS 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Quantity (thousands per week) Price Paid Quantity No Tax $50.00 4,000 With Tax $50.00 4,000
9. Effect of a tax on buyers and sellers The following graph shows the daily market for shoes when the tax on sellers is set at $0 per pair. Suppose the government institutes a tax of $23.20 per pair, to be paid by the seller. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Hint: To see the impact of the tax, first enter the value of the tax in the Tax on Sellers field. Adjust the value in the price field to move the green line to the after-tax equilibrium so that quantity demanded equals quantity supplied. Graph Input Tool Market for Shoes 200 180 I Price (Dollars per pair) $100 160 Quantity Demanded (Pairs of shoes) Quantity Supplied (Pairs of shoes) Supply 250.00 250.00 140 120 100 Supply Shifter 80 Demand Tax on Sellers (Dollars per pair) 60 0.00 40 20 50 100 150 200 250…
Suppose a tax is such that an individual with an income of $10,000 pays $2,500 of tax, a person with an income of $20,000 pays $5,000 of tax, a person with an income of $30,000 pays $7,500 of tax, and so forth. Instructions: Enter your answers rounded to 1 decimal place. a. What is each person's average tax rate? Income Таx Paid Average Tax Rate $ 10,000 $ 2,500 % 20,000 5,000 30,000 7,500
1. Consider the following policies, each of which is aimed at reducing violent crime by reducing the use of guns. Illustrate by demand and supply diagrams followed with an explanation the effect of each of these proposed policies. [Hint: For each question, show the price paid by consumers, the price received by producers, and the quantity of guns sold, the difference between the price paid by consumers and the price received by producers, has the number of guns sold increased or decreased] A tax on gun buyers а. b. A tax on gun sellers A binding price floor on guns с. d. A tax on gun ammunition
Suppose that the government decides to charge cola consumers an excise tax. Before the tax, 12 million cases of cola are sold every month at a price of $3.50 per case. After the tax, 6million cases of cola are sold every month; consumers pay $4.00 per case and producers receive $2.00 per case. a. What is the excise tax on cola?b. On whom does the incidence of the tax fall more heavily?c. How much government revenue will be generated by the excise tax?
6. Who should pay the tax? The following graph shows the labor market for research assistants in the fictional country of Universalia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 250. Suppose the government has decided to institute a $4-per-hour payroll tax on research assistants and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of…
7. Effect of a tax on buyers and sellers The following graph shows the daily market for shoes. Suppose the government institutes a tax of $23.20 per pair. This places a wedge between the price buyers pay and the price sellers receive. PRICE (Dolars per pair) 100 90 0 0 Before Tax After Tax 100 200 Buyers Sellers W 420, 70 Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax Quantity Price Buyers Pay (Pairs of shoes) (Dollars per pair) Price Sellers Receive (Dollars per pair) Supply Derrand 400 500 600 300 000 600 QUANTITY(as of show) Using the data you entered in 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 pair) Elasticity The burden of the tax falls more heavily on the eastic side of the…