3. The graph shows the effect of a tax imposed on soft drinks. Use this graph to answer the questions. S2 Amount of Тах A B E H Quantity of soft drinks a. Which areas in the graph represent the deadweight loss? b. Which areas in the graph represent the consumer surplus? c. Which areas in the graph represent the producer surplus? Price (dollars) P.

3. The graph shows the effect of a tax imposed on soft drinks. Use this graph to answer the questions. S2 Amount of Тах A B E H Quantity of soft drinks a. Which areas in the graph represent the deadweight loss? b. Which areas in the graph represent the consumer surplus? c. Which areas in the graph represent the producer surplus? Price (dollars) P.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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If Soltani factory produces 1000 pieces of products, its total cost is equal to 50,000 monetary units, and if it produces 2,000 pieces of the same product, its total cost is equal to 80,000 monetary units. If each product is sold at a price of 40 monetary units, it is desirable: a. By drawing a diagram, specify the breaking point for it. B. If we want to make a profit equal to 20,000 units by selling 2500 pieces of product, what should be the variable cost? Use equations below: F Profit(P) = pQ - (F + vQ) TR=pQ TC=F+vQ Q=F/(p-v)
4. In order to reduce farm output, raise farm prices, and thus raise farm incomes (revenues), the government pays farmers to set aside a portion of their land from production. Using a graph, explain in terms of the elasticity of demand for farm products why farmers may be better-off when harvests are low even if we ignore the money they receive from the set-aside program.
2. The following graph shows the demand and supply for i-Pods. Price 100 80 60 40 20 0 0 80 160 240 Quantity of i-pods 320 is D 400 a. What is equilibrium price and quantity? b. Suppose that a $20 per unit sales tax is placed on the product. What is the new equilibrium price and quantity? c. What proportion of the tax is paid by the consumer, and what proportion is paid by the seller in this case?
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4. Suppose the market for apples are shown in the graph below, Calculate Consumer surplus _____________ and Producers Surplus _________________.
Just complete Question 7A and 7B
2. Consider the original market for pizza in Collegetown, Price Quantity demanded supplied of of pizza Quantity illustrated in the accompanying table. Collegetown officials decide to impose an excise tax on pizza of $4 per pizza. a. What is the quantity of pizza bought and sold after the imposition of the tax? What is the price paid by consumers? What is the price received by producers? b. Calculate the consumer surplus and the producer surplus after the imposition of the tax. By how much has the imposition of the tax reduced consumer surplus? By how much has it reduced producer surplus? c. How much tax revenue does Collegetown earn from this tax? of pizza pizza $10 9 1 5 8 2 4 7 3 3 4 2 5 5 1 4 d. Calculate the deadweight loss from this tax. 3 7 2 8 1 9
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1. Price 10 D, 10 15 Quantity The above graph shows a market with a tax imposed on consumers of a good. (a) On the graph, shade or label the region equal to the deadweight loss of the tax. Calculate the size of the deadweight loss. (b) On the graph, shade or label the region equal to the tax revenue from the tax. Calculate the size of the tax revenue.
1. Describe the difference between demand and supply. 2. How does the law of demand and supply affect the market? 3. How does equilibrium occur in market? 4. What are the price controls of the government?