6. (19 pts) The figure below represents demand and supply in the market for cigarettes. Use the diagram to answer the following questions. Price ($ per pack) S2 Таx $2.50 1.50 1.25 Demand Quantity (billions of packs per year) 01 18 20 a. How much is the government tax on each pack of cigarettes?250-14 b. What portion of the unit tax is paid by consumers? c. What portion of the unit tax is paid by producers? d. What is the quantity sold after the imposition of the tax? e. What is the after-tax revenue per pack received by producers? f. What is the total tax revenue collected by the government? g. What is the value of the excess burden of the tax? h. Is this cigarette tax efficient?

6. (19 pts) The figure below represents demand and supply in the market for cigarettes. Use the diagram to answer the following questions. Price ($ per pack) S2 Таx $2.50 1.50 1.25 Demand Quantity (billions of packs per year) 01 18 20 a. How much is the government tax on each pack of cigarettes?250-14 b. What portion of the unit tax is paid by consumers? c. What portion of the unit tax is paid by producers? d. What is the quantity sold after the imposition of the tax? e. What is the after-tax revenue per pack received by producers? f. What is the total tax revenue collected by the government? g. What is the value of the excess burden of the tax? h. Is this cigarette tax efficient?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price (dollars per pie) 6. 54 4. 4 5 6. Quantity (thousands of pies per week) The demand for apple pies is perfectly elastic. If the government taxes apple pies at $1 a pie, then A) the buyer pays the entire tax. B) the seller pays the entire tax. C) the seller and the buyer split the tax but the seller pays more. who pays the tax depends on whether D) the government imposes the tax on pie buyers or on pie sellers. 2.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
4-5 Draw the price effect and the quantity effect for a price change from $60 to $70. Which effect is larger? Does total revenue increase or decrease? No calculation is necessary.
(Figure: The Blu-ray Disc Rental Market) Use Figure: The Blu-ray Disc Rental Market. If the rental price of Blu-ray discs rises from $5 to $7: Question 2 options: v supply will increase from 50 to 70 rentals per weekend. the quantity demanded will decrease from 50 to 30 rentals per weekend. the quantity supplied will increase from 50 to 60 rentals per weekend. demand will decrease from 50 to 30 rentals per weekend.
I cant seem to remeber the formula to use to fill out S2 and D2
4. In order to reduce farm output, raise farm prices, and thus raise farm incomes (revenues), the government pays farmers to set aside a portion of their land from production. Using a graph, explain in terms of the elasticity of demand for farm products why farmers may be better-off when harvests are low even if we ignore the money they receive from the set-aside program.
10. (Figure: Producer Surplus in the Market for Baseballs) Consider the figure Producer Surplus in the Market for Baseballs. If the price falls from P₂ to P₁, the producer surplus will decrease by the area: Price of baseballs P2 P₁ P2P1KM P2M0. OLMK Ο ΡΙΚΟ L K M S Q₁ Q3 Quantity of baseballs
Indicate the answer choice that best completes the statement or answers the question. 1. (Figure: Demand for jazz shows) The graph shows Jayden's monthly demand curve for live music at a small, local venue. Price per show ($) $20 $18 $16 $14 $12 $10 $8 $6 $4 $2 $0 Demand 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Quantity of shows If Jayden currently attends six shows per month, what is probably TRUE? a. The price of a concert ticket is between $9 and $12. b. Jayden does not have enough income to go to more than six shows per month. c. Each concert provides Jayden with the same marginal benefit. d. If the price rose to $18, Jayden would not attend any concerts. Page 1
C24) The cost of producing refrigerators has fallen over the past decade. Let's consider some implications of this fact. a. Draw a supply-and-demand diagram to show the effect of falling production costs on the price and quantity of refrigerators sold. b. Suppose the supply of refrigerators is very elastic. Who benefits most from falling production costs - consumers or producers of these refrigerators? Please draw an extreme case, i.e. perfectly elastic supply.
13. Application Problem Use the table to find the (a) Linear Supply equation: P = mx + b (b) Linear Demand equation: P = mx + b Prof herbert (c) The equilibrium point. This is the point where the two lines meet. Supply In millions Demand in millions Year Price $ per unit 2002 2003 340 270 2,22 370 250 | 2.72 Hint to finding solution (a) Find the slopes for demand and supply using the point (x,p) given in the table (b) Use point slope equation substituting the slope obtained and one point (x,p) to obtain the requires demand and supply equations respectively. (c) Graph the two equations, The point (x,p) the two lines meet is the equilibrium point meaning when Demand = Supply. (x,p) 14. Modeling problem Medgar Evers College bookstore sells a custom printed T-Shirt. The cost function is given as C(x) = 250 + 4.50x. (a) What is the slope in the cost function (b) Interpret the meaning of the slope in the context of this problem.
Figure: The Demand and Supply of Wheat Price (per bushel) $10 9 8 7 6 5 4 3 2 1 0 Reference Ref 3-6 2 B. $5: 5,000 C. 56; 7,000 D. $8; 8,000 4 8 10 12 Quantity of wheat (thousands of bushels per period) 6 (Figure: The Demand and Supply of Wheat) Look at the figure The Demand and Supply of Wheat. If there is an increase in demand of 2,000 bushels at each price, the equilibrium price and quantity will be and bushels, respectively. A. $7; 7,000
Refer to the figure, Price (dollars) 600 550 500 450 400 350 300 250 200 150 100 50 0 Market for Game Consoles S 10 20 30 40 50 60 70 80 90 100110 Quantity Toola DL 0 O Use the graph to show the area representing the deadweight loss, and then determine the deadweight loss created as a result of setting the price at $150. Instructions: Use the tool provided "DL to illustrate this area on the graph. Deadweight loss: $