Hand written solutions are strictly prohibited Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per case. (Hint: To find the equilibrium quantityafter the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by usingthe green points (triangle symbol) to plot total tax revenue at each of those tax levels.Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.TAX REVENUE (Dollars)1000900DEADWEIGHT LOSS (Dollars)8007006005004003002001001000900800Suppose the government is currently imposing a $15-per-case tax on champagne.700True or False: The government can raise its tax revenue by increasing the per-unit tax on champagne.800500On the following graph, use the black curve (plus symbols) to illustrate the deadweight loss in these cases. (Hint: Remember that the area of atriangle is equal tox Base x Height. In the case of a deadweight loss triangle found on the graph input tool, the base is the amount of the taxand the height is the reduction in quantity caused by the tax.)400030020001005O TrueO False01051530TAX (Dollars per case)105015 20 25 30TAX (Dollars per case)Laffer CurveAs the tax per case increases, deadweight lossDeadweight Lossincreases by a greater and greater amountincreases and then decreasesincreases at a constant rate 4. The Laffer curveGovernment-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections.To understand the effect of such a tax, consider the monthly market for champagne, which is shown on the following graph.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.PRICE (Dollars per case)504540351050SupplyDemand0 10 20 30 40 50 60 70 80 90 100QUANTITY (Cases)Graph Input ToolMarket for ChampagneQuantity(Cases)Suppose the government imposes a $10-per-case tax on suppliers.At this tax amount, the equilibrium quantity of champagne isDemand Price(Dollars per case)Tax(Dollars per case)4030.0010.00Supply Price(Dollars per case)cases, and the government collects $(?)20.00in tax revenue.

The Laffer curve illustrates the tax revenue at each possible level of tax rate. So, the Laffer…

4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for champagne, which is shown on the following graph. 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. Graph Input Tool ?

4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for champagne, which is shown on the following graph. 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. Graph Input Tool ?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Panther Acre Cattle Company - Chapter 7 Lab A typical farm or ranch problem is determining the optimum or profit-maximizing weight to sell fed cattle. Assume the feeder cattle are purchased at 600 pounds. The feed required and the weight gain is shown in the table below. Feed costs 7¢ per pound and feeder cattle prices are as follows: Weight Price per Pound 600-899 lbs 72¢ go to 3rd 900-1099 lbs decimal 1100 lbs or more 70¢ Point 67¢ Pay attention to the price changes when computing MVP. Input Output Feed Weight Selling Required Gain Weight Total Average Marginal Marginal Marginal Revenue Physical Physical Value Input (lbs) (lbs) (lbs) Product Product Product Cost 600 0 0 600 432 XXX XXX XXX XXX 500 50 So 650 468 0.10 0.083 1,100 145 as 745 536.40 0.132 6.158 1,700 235 aol 835 601.20 0.138 0.15 2,300 320 85 920 644 0.139 2,900 400 80 1,000 700 0.138 3,500 465 65 1,065 745, 50 0.133 4,100 525 60 1,125 753.75 0.128 4,700 575 SO 1,175 787.25 0.122 5,300 615 40 1,215 814.05 0.116 5,900 645…
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