5. Calculating tax incidence Suppose that the local government of Corpus Christi decides to institute a tax on cider producers. Before the tax, 40,000 cases of cider were sold every week at a price of $11 per case. After the tax, 34,000 cases of cider are sold every week; consumers pay $13 per case, and producers receive $6 per case (after paying the tax). The amount of the tax on a case of cider is $ burden that falls on producers is $ per case. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O True per case. Of this amount, the burden that falls on consurhers is False per case, and the

5. Calculating tax incidence Suppose that the local government of Corpus Christi decides to institute a tax on cider producers. Before the tax, 40,000 cases of cider were sold every week at a price of $11 per case. After the tax, 34,000 cases of cider are sold every week; consumers pay $13 per case, and producers receive $6 per case (after paying the tax). The amount of the tax on a case of cider is $ burden that falls on producers is $ per case. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O True per case. Of this amount, the burden that falls on consurhers is False per case, and the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6 . Consumer Surplus Ana buys an iPhone for $150 and gets a consumer surplus of $200. Her willingness to pay for an iPhone is $_________. If she had bought the iPhone on sale for $100, her consumer surplus would have been $_______. If the price of the iPhone had been $370, her consumer surplus would have been $_________.
The figure shows the market for tires. The figure shows that the government has imposed a tax of per tire. Price (dollars per tire) O A. $40 S+ tax 70 В. $60 60 O C. $30 50 +..... O D. $10 hat ma O E. None of the above answers is correct. 40 As 30 20 Ass 10 10 20 30 40 50 60 70 Quantity (millions of tires per month) its AR O Time Remaining: 00:59:31 Next ompleted This course (ECON202 s2022 online) is based on Bade/Parkin: Foundations of Microeconomics, 9e MacBook Pro terwebsite name
Don't use chatgpt and make sure you include the graphs needed (a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay?(b) Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? (c) If you were a policymaker and wanted to promote a fat tax in the UK, whatwould you cover in your policy campaign?
1
d. 28. Soda is produced in the market shown in the graph below. Answer the following questions based on the information given in the graph. Price per case 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 S D 8 9 10 Quantity (millions of cases) A. To reduce the consumption of soda, suppose the government places-a $2 per unit tax. i. Will the price of soda increase by the full amount of the tax? Explain. ii. Calculate the tax revenue the government collects from the sale of soda. Show your work. iii. Will consumer surplus increase, decrease, or remain the same after the sales tax? iv. Calculate the deadweight loss created by the tax. Show your work. B. Suppose that instead of imposing a per unit tax, the government sets a price ceiling of $7. Identify the quantity of soda that will be exchanged in the market as a result of the price ceiling. Explain.
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Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: a. The new equilibrium quantity of soft drinks bought and sold would be ___________ million liters. b. The new equilibrium price paid by buyers of soft drinks would be $__________ per liter. c. The new equilibrium price received by sellers (after-tax) would be $__________ per liter.
1. Suppose that the market demand for coffee is Pd = 15 - Qd and the market supply is Ps= Qs - 5. What is the equilibrium price and quantity for coffee? Suppose that the government imposes a tax of $1 per unit to reduce coffee consumption and raise government revenues. What will be the new equilibrium quantity? What price will the buyer pay? What price will the seller receive? A o F2 BE #3 ㅁㅁ F3 $ A t 4 OFFIC DEO DOD 000 F4 % 5 F5 MacBook Air 6 F6 & 7 L * 8
Price (dollars per hour) 7.00 6.60 6.00 5.60 5.00 0 1 2 3 4 5 6 7 8 Quantity (thousands of frisbees) Figure 6.3.1 OB) $5.60. S + tax Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed. On each frisbee, the sellers' burden of the tax is OA) $0.60. OC) $0.40. S OD) $6.60.
5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40 billion cases of cola were sold every year at a price of $7 per case. After the tax, 34 billion cases of cola are sold every year; consumers pay $8 per case (induding the tax), and producers receive $4 per case. per case, and the The amount of the tax on a case of cola isS per case. Of this amount, the burden that falls on consumers is S burden that falls on producers is s per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers. O True O False
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Price (dollars per gallon) S2 $5.50 3.50 2.50 D Quantity (millions of gallons per month) 30 40 45 Assume the graph above illustrates a new tax put into the market for soft drinks. S2 is the supply curve with the $2 tax in place. What price would consumers pay if the tax was placed on consumers instead of producers? 1) $2.00 O 2) $3.50 3) $2.50 4) $1.50