4. The dollar value of fish caught from Lake Spooky is given by f(b) = 1006 56², where b is the number of fishing boats. Fishing boats are costless to buy and operate. What is the optimal tax that the Department of Fish Affairs should impose on fishing boats, so as to avoid the Tragedy of the Commons? (a) $50 per boat (b) $1 per boat (c) $0 per boat (d) $100 per boat

4. The dollar value of fish caught from Lake Spooky is given by f(b) = 1006 56², where b is the number of fishing boats. Fishing boats are costless to buy and operate. What is the optimal tax that the Department of Fish Affairs should impose on fishing boats, so as to avoid the Tragedy of the Commons? (a) $50 per boat (b) $1 per boat (c) $0 per boat (d) $100 per boat

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter17: Externalities And The Environment

Section: Chapter Questions

Problem 4.9P

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The graph below represents the market for tubs of yoghurt. Answer the following questions assuming a positive per-unit tax is placed on tubs of yoghurt. P S 8.50 8 5.50 25 (a) The per-unit tax is placed on 50 55 (b) The size of the tax is $ [Select] [Select] Buyers that sellers receive after the tax is $ [Select] 80 85 (c) The price that buyers pay after the tax is $ [Select] (d) The quantity traded with the tax in place is receive $ [Select] (e) After the tax, buyers will pay $ [Select] relatively more [Select] (f) In the end, buyers pay [Select] D2 Q [Select] ✓ relative to the quantity traded without tax. per tub. ✓ less per tub. per tub. than sellers. per tub. The price tubs leading to more per tub. Sellers will because their demand curve is
13. If a good has a perfectly inelastic supply curve and downward sloping demand curve, then: (a) A unit tax in this market creates deadweight loss. (b) Any subsidy imposed in this market will have no effect on price. (c) An ad valorem tax in this market is less effective than a unit tax. (d) A subsidy will be effective in changing P but not Q. (e) None of the above.
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Theoretically and graphically explain the incidence of ad-valorem tax on the equilibrium price and quantity
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