a) Suppose demand for good X is given by QD = 900- p/2 where p is the price and QD the quantity demanded. Supply is given by QS = p/4. Suppose 60 TL tax is impose
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- a) Suppose demand for good X is given by QD = 900- p/2 where p is the price and QD the quantity demanded. Supply is given by QS = p/4.
Suppose 60 TL tax is imposed on each unit of X that is purchased.
What is the burden of the tax? Explain the key factors that determine the incidence of the tax.
b) Describe the main differences between partial and general equilibrium analysis in the context of examining tax incidence.
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- Using general equilibrium analysis, and taking into account feedback effects, analyze the effects of increased taxes on airline tickets on travel to major tourist destinations such as Florida and California and on the hotel rooms in those destinations.Consider two substitute products; movies and Box Office rentals. With the aid of graphical illustrations, explain why the outcome of a general equilibrium analysis can differ substantially from that of a partial equilibrium analysis, when evaluating the impact of a unit tax on movie tickets.In an effort to reduce alcohol consumption in Jamaica, the government of Jamaica (GOJ) is considering levying a $2/unit tax on the sale of coconuts (i.e., on the consumer). Suppose the demand curve for liquor is: Qd = 2000 -100p .....(1) and the supply curve for liquor is: Qs = -100 +200p .....(2) i) State who bears the statutory incidence of a $2 per unit tax on the sale of liquor? And who bears the economic incidence of this tax? ii) Calculate the pre-tax and post-tax equilibria, and explain the new equilibrium results in terms of: consumer tax burden, producer tax burden, tax wedge, and government revenue. iii) Provide a carefully labelled graphical analysis of your answers in part a(ii). Indicate on your graph, with accuracy, the pre-tax and post-tax equilibria, consumer tax burden, producer tax burden, and government revenue.
- Based on the model of demand and supply, the demand and supply functions are given at the following equations: P = 4QS QD = 500 – P Where: QS is the number of packs of cigarettes offered for sale; QD is the number of packs of cigarettes purchased on the market, P is the price of pack of cigarettes. Find the equilibrium price and the number of packs of cigarettes at market equilibrium. To reduce cigarette consumption, the state has set a minimum price of P=15. Determine the size of the imbalance at this price.1) Given the below functions for supply and demand: Supply: P = In (Q – 3) Demand: P = 22e¬arctan (Qp) Find the equilibrium price using the welfare optimization method directly.Consider the following demand function for airline tickets (quantities are in thousands): Q = 10-0.1p, + 0.4py + 0.25p, + 0.005Y, where P, = price of an airline ticket Py = price of a bus ticket Q = quantity demanded P, = price of gasoline Y = consumer income %3D According to the above equation, airline tickets and bus tickets are V goods. If, in equilibrium, the cross-price elasticity between airline tickets and gasoline is 1.1; when the price of the gasoline increases by 4%, the quantity demanded of airline tickets increases by % (enter your response rounded to two decimal places). Reaction O stv MacBook Air 80 DII DD F1 F2 F3 F4 F5 F6 F7 F8 F9 F10 F11 ! @ #3 $ 一 2 3 4. 6 7 Q W E Y U { A F G J K L Z C V B- M く > Fion command command option * 00 エ R
- General versus Partial Equilibrium Analysis 1) Briefly distinguish between general equilibrium analysis and partial equilibrium analysis.One of the pandemic measures adopted by the city of Regina consists of a food-delivery fee cap (maximum fee) of 14% of the pre-tax order price. This fee is charged by delivery services such as Uber Eats, DoorDash, and Skip the Dishes. Some restaurants in the city argue that the cap (in percentage terms) is to high due to the small profits earned in this industry. Represent graphically the equilibrium in the market for food (restaurants) in the city in the absence of any interventionsThanks in advance!
- Market demand and supply for cases of beer are given by Q = 875 – 5P and Q, = 20P. The equilibrium price is P= $35 per case and the equilibrium quantity is Q = 700 cases. Suppose the government decides it wants to use the beer market to raise some tax revenue. It levies a tax of $8 per case on beer consumers. Complete parts a through e below. ..... a) What is the equation of the demand curve with the tax included? Let P; be the amount producers will receive. Qq =+ OP: (Simplify your answers.) b) What is the new, after-tax equilibrium? The after-tax equilibrium price is $ and the quantity is (Round to two decimal places as needed.) c) What price do consumers now pay? $ (Round to the nearest cent as needed.) d) Who has the larger burden of the tax? Consumers pay $ more than before the tax. Firms receive $ less than before the tax. Therefore, bear the larger burden. (Round to the nearest cent as needed.) e) What is the deadweight loss due to the tax? $ (Round to the nearest cent as…The current equilibrium price and quantity are known. Suppose the government plans on generating tax revenue of $10 million by imposing a per-unit tax on good A. The government fully knows the supply curve for good A, but the demand curve is unknown. As a result, the government hires an economist to estimate the demand for good A. Based on these estimates, in order to raise the $10 million in revenue, the government will impose a $1 per-unit tax, which is expected to make the price consumers pay after the tax equal to $10 per unit and the price suppliers receive after the tax equal to $9 per unit. However, when the tax is actually implemented, the price consumers ended up paying was $9.90 per unit. Relative to what the government originally expected, which of the following must be true? The deadweight loss from the tax will be higher, the tax revenue from the tax will be higher, the quantity transacted of the good will be higher. The deadweight loss from the tax will be lower, the tax…The demand function of a good is given by p(Qd ) = 160 – Qd and the supply function by Qs = 150. a) Calculate the equilibrium price. Represent graphically. b) If supply changes to Qs = 120: What would be the new equilibrium price? Represent graphically. 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.