7 G 5 4 3 2 دو 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 E Figure:Supply and Demand Graph (copied twice in case you want to draw on it) 1. (Figure Supply and Demand Graph) In the market represented by the graph, if the government sets a tax of $6, what is the government revenue received from this tax? A) $0 B) $6 C) $18 D) $36

7 G 5 4 3 2 دو 7 6 5 4 3 2 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 2 3 4 5 6 7 8 9 10 11 12 13 14 E Figure:Supply and Demand Graph (copied twice in case you want to draw on it) 1. (Figure Supply and Demand Graph) In the market represented by the graph, if the government sets a tax of $6, what is the government revenue received from this tax? A) $0 B) $6 C) $18 D) $36

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. Calculating tax incidence Suppose that the local government of Raleigh decides to institute a tax on soda producers. Before the tax, 25 million liters of soda were sold every month at a price of $11 per liter. After the tax, 19 million liters of soda are sold every month; consumers pay $16 per liter, and producers receive $7 per liter (after paying the tax). The amount of the tax on a liter of soda is 3 that falls on producers is 5 per liter. O True per liter. Of this amount, the burden that falls on consumers is True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on consumers. False per liter, and the burden
5. Agricultural export subsidies in a small nation The following graph shows the market for wheat in Canada, where Dc is the demand curve, Sc is the supply curve, and Pw is the free trade price of wheat. Assume that Canada is a relatively small producer of wheat, so changes in its output do not affect the world price of wheat. Also assume that Canada is currently open to free trade, and domestic consumers are able to purchase wheat at the world price with negligible transportation costs. Suppose a subsidy of $80 per ton is granted to exporters in Canada, allowing them to sell their products abroad at prices below their costs. Assume that trade restrictions are also put in place in order to prevent domestic consumers from buying wheat abroad at the world price. Use the grey line (star symbols) to indicate the world price of wheat plus the subsidy on the following graph. Then use the black point (plus symbol) to indicate the price of wheat in Canada and the quantity demanded at that…
7. (Market for Pollution Rights) The graph in page 302 shows the market for pollution rights. a. If there are no restrictions on pollution, what amount isdischarged? b. What is the quantity supplied and the quantitydemanded if the government restricts the amount ofdischarge to Q* but gives the permits away? c. Where is market equilibrium if the government sells thepermits at the market-clearing price? Illustrate this on the graph.
5. Agricultural export subsidies in a small nation The following graph shows the market for wheat in Canada, where Dc is the demand curve, Sc is the supply curve, and Pw is the free trade price of wheat. Assume that Canada is a relatively small producer of wheat, so changes in its output do not affect the world price of wheat. Also assume that Canada is currently open to free trade, and domestic consumers are able to purchase wheat at the world price with negligible transportation costs. Suppose a subsidy of $80 per ton is granted to exporters in Canada, allowing them to sell their products abroad at prices below their costs. Assume that trade restrictions are also put in place in order to prevent domestic consumers from buying wheat abroad at the world price. Use the grey line (star symbols) to indicate the world price of wheat plus the subsidy on the following graph. Then use the black point (plus symbol) to indicate the price of wheat in Canada and the quantity demanded at that…
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5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 5,000 cases of beer are sold every week; consumers pay $6 per case, and producers receive $3 per case (after paying the tax), The amount of the tax on a case of beer is S burden that falls on producers is True 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 False per case. Of this amount, the burden that falls on consumers is 5 per case, and the
Comcast has a cable monopoly. The following graph shows the demand, MR, and MC curve of Comcast. Use the graph to answer questions 3 to 8. Price (P) and Costs (in dollars per subscription) $25 $22 $21 $20 $19 0 5 6.5 MC 7 MR ATC Q (Number of subscriptions in millions per month)
2- The demand curve for a good is q = 100 p/c where c is a constant and c ≥ 0. The supply curve for the good is q=10+p. A quantity tax of t=$10 per unit is imposed on this product. a. By how much will the price of the product rise? b. What are the maximum and minimum possible changes in price? C. What is the producer's share of the tax? d. Find the elasticity of demand at p=10. (Assuming c≥ 0.1).
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4.(a) What is price ceiling and price floor? When each of them is binding and not binding. Explain. (b) What is tax incidence. Suppose that some amount of per unit tax is imposed on buvers. Draw a diagram to show w hat is the new market outcome. What is the same anmount of tax would have been imposed on sellers? How this would change he outcome?