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- Suppose that the government imposes a per-unit tax on cell phones. The tax is imposed on producers of cell phones and the amount of the tax is $50 per cell phone. The following graph shows the effect of the tax. Use the graph to answer the following questions. a) How much of the tax per cell phone is paid by producers? How much of the tax per cell phone is paid by consumers? b) How much tax revenue (in total) does the government collect from the tax imposed on cell phones? c) What is the amount of the deadweight loss due to the presence of the tax on cell phones?The following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. How much will bus service providers get per ticket after the tax is imposed? $5.50 $4 $4.50 $5Question 7 Read the following scenario and answer the questions that follow. Scenario 4 In the market for cigarettes the impact of a specific excise tax of R10,00 is depicted in the diagram below. D ST Тах E 55,40 50,00 45,40 E2 21,00 ST S 11,00 Q 50 120 150 200 Packets per week (thousands) In the absence of any excise tax, a packet of cigarettes cost R50,00 and the equilibrium quantity is 150 000 packets per week. For scenario 4, discuss the impact of a specific excise tax of R10,00 in the market for cigarettes with reference to the provided diagram. Your discussion should incorporate the change in price received by suppliers and paid by consumers owing to the imposition of the specific excise tax. 7.1. Price per packet (R)
- Does a tax on buyers affect the demand curve?What is the incidence of an excise tax when demand is highly inelastic? Highly elastic? What effect does the elasticity of supply have on the incidence of an excise tax? What is the effifi ciency loss of a tax, and how does it relate to elasticity of demand and supply?The following is a Table that contains the demand and supply schedules of chocolate ice-creams. Price (cents per ice-cream) $0.90 0.80 0.70 0.60 0.50 0.40 Quantity Demanded (millions per day) 1 asifWNH 2 3 4 5 6 Quantity Supplied (millions per day) 7 6 10 10 5 4 3 2 a) If there is no tax on ice-creams, what is their price and how many are produced and consumed? b) If a tax of $0.20 cents is imposed on every ice-cream consumed, what happens to the price of an ice-cream and the number produced and consumed? Illustrate the effects of this policy on the market for chocolate ice-creams. c) How much tax does the government collect and who pays it?
- The following graph shows the weekly market for handbags in some hypothetical economy. Suppose the government levies a tax of $23.20 per bag. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE (Dollars per bag) 100 90 00 R 70 8 50 40 R20 10 0 10 Tax Wedge Supply Demand 20 30 40 50 00 70 QUANTITY (Bags of handbags) 00 00 100 C DThe following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. How many rides will be demanded after the introduction of the excise tax? 7 million 10 million 8 million 9 millionDoyle and Samphantharak (2008) find that when a 5% gas tax is implemented, prices consumers pay for gas increase by about 4%. What role does demand elasticity play in determining the size of this price change? That is, under what demand elasticity cases would the price change be closer to 5%, or closer to 0%? Illustrate and explain using supply-and-demand graph(s)..
- Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and ST is the supply curve after the tax. Price ST 18 12 10 8 7 3 D 10 12 QuaAttached 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.What is an indirect tax give two examples in economics