6. Changes in taxesThe following graph shows the aggregate demand curve.Shift the aggregate demand curve on the graph to show the impact of a tax hike.130PRICE LEVELF11201101009080F3F4Aggregate DemandF5F6Aggregate DemandF7F8F9F10F11F12FnInsecDrt' PRICE LEVEL1201101009080Aggregate Demand0102040506030OUTPUTSuppose the governments of two different economies, economy J and economy K, implement a tax cut of the same size. The tax cut in economy J ispermanent, while the tax cut in economy K is temporary. The economies are identical in all other respects.The tax cut will have a larger impact on aggregate demand in the economy with theGO70Aggregate DemandO

IntroductionAggregate demand, also known as domestic final demand in macroeconomics, is the entire…

6. Changes in taxes The following graph shows the aggregate demand curve. Shift the aggregate demand curve on the graph to show the impact of a tax hike. 130 PRICE LEVEL 120 110 100 90 80 Aggregate Demand H a J Aggregate Demand i & 18 Ⓒ 6

6. Changes in taxes The following graph shows the aggregate demand curve. Shift the aggregate demand curve on the graph to show the impact of a tax hike. 130 PRICE LEVEL 120 110 100 90 80 Aggregate Demand H a J Aggregate Demand i & 18 Ⓒ 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(Answer the E) Its is known that the demand function for a product is P = 24 - 1/2Q and the supply function Q = 4 + 2PIts is known that the demand function for a product is P = 24 - 1/2Q and the supply function Q = 4 + 2P If the government provides a subsidy for tge product of Rp 10/ unit of goods, what is the price and quantity of goods in balance new E. Calculate the amount of subsidy received by consumers and manufacturers , as well subsidies issued by the government *Rp : Indonesian currency
12. Effect of a tax on buyers and sellers The following graph shows the daily market for shoes when the tax on sellers is set at $0 per pair. Suppose the government institutes a tax of $11.60 per pair, to be paid by the seller. (Hint: To see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) 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 pair) 100 90 80 70 60 50 40 30 20 10 0 Demand Before Tax After Tax 0 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Pairs of shoes) Buyers Sellers Supply Tax…
9. Effect of a tax on buyers and sellers The following graph shows the daily market for wine when the tax on sellers is set at $0 per bottle. Suppose the government institutes a tax of $40.60 per bottle, to be paid by the seller. (Hint: To see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then, enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) 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. 200 PRICE (Dollars per bottle) 160 Supply 140 120 100 14 80 Demand 60 40 20 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Bottles of wine) 180 0 Before Tax After Tax Graph Input Tool…
Briefly discuss the effect of price elasticity of supply and demand on tax incidence. When the demand for a product is less elastic than supply. pay the majority of the tax on a product; when supply for a product is less elastic than the demand, pay the majority of the tax on the pre firms consumers
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6) The following graph shows the effect of a per-ticket tax on plane tickets from Boston to Tampa. Use the graph to answer questions 5 to 10. O $10 $30 $40 Price (P) of airline tickets (in dollars per ticket) What is the amount of the tax per ticket from Boston to Tampa? $20 230 200 190 2850 3000 with tax D Sno tax Figure 14 Image author created Quantity (Q) of airline tickets (thousands per day)
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7. Effect of a tax on buyers and sellers The following graph shows the weekly market for handbags in some hypothetical economy. Suppose the government levies a tax of $46.40 per bag. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE (Dollars per bag) 200 823953 2 2 2 2 160 100 140 120 100 o 0 50 Tax Wedge Supply Demand 100 150 200 250 300 350 400 450 500 QUANTITY (Bags of handbags) ?
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Government levied a tax on good A. The less elastic the demand is, the greater or the smaller the tax burden consumers bear? Also, is the after-tax equilibrium quantity the greater or smaller? Consumers’ tax burden: After-tax equilibrium quantity:
Question 16 All taxes create some deadweight loss except those on goods O that can be resold for a higher price. O with a very low demand. with a very elastic demand or supply. that everyone likes to consume. with a perfectly inelastic demand or supply.
Can you explain why am I answer is wrong and what the correct one is.