Show work... a) What is the pre-tax equilibrium price of a domesticairline ticket?b) How much more will consumers pay for a ticket afterthe tax is imposed? Suppose demand for domestic airline tickets is given by P= 800 - 3Q and supply is given by P = 10 + 2Q.The government, in an attempt to encourage Australiansto consider driving instead of flying, decides to impose a$50 tax on plane tickets to be paid by consumers.

The effect of the tax on the supply-demand equilibrium is to shift the quantity toward a point where…

Answered: a) What is the pre-tax equilibrium…

a) What is the pre-tax equilibrium price of a domestic airline ticket? b) How much more will consumers pay for a ticket after the tax is imposed?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose the firm only produces good X and that the price of good Y, a substitutegood, decreases. What will happen to the optimal quantity of labor the firm willhire? Explain.
The following table contains the relationship between a number of trainers working at a new gym and the number of client's they can train. These client's represent the output of trainers. Client's pay $40 per session. A. Find the marginal product of labor (mpl) and the value of the marginal product of labor (vmpl) for each additional trainer hired and record these numbers in columns in the table. B. Premier trainers earn $200 an hour. How many trainers will the gym hire?
At Yennefer's current production level, a extra bunch of herbs adds 19 extra spells. Each bunch ofherbs costs $54. What is Yennefer's Marginal Cost of an extra spell?
38) In the short run, the marginal product of labor might increase initially as more workers are hired because A) the first workers hired get to use the best equipment. B) specialization allows a worker to focus on one task, thereby increasing her proficiency at that task. c the best workers are hired first and later hires are not as skillful. Dj beyond some point, a firm has hired too many workers.
At Stacy's current production level, an extra bunch of scarves adds 20 extra hats. Each bunch of scarves costs $53. What is Stacy's Marginal Cost of an extra hat?
You own a small sandwich shop with two employees. They've asked you to consider hiring additional workers for the lunch shift, but you are concerned that doing so may cut into you're profits. Using the table below, calculate the marginal product, value of marginal product, and marginal profit of hiring additional workers. What action should you take (choose one) A. Hire two more employees B. Hit one more employee C. Fire one employee D. Do not hire anyone
Each of the following examples reflect some labour cost faced by an employer. Select all of those which are considered quasi-fixed labour costs. Select one or more: a. Harpreet spent $1,000 advertising a recent job opening b. Denise pays her entry-level employees an hourly wage of $20 c. John recently laid off five workers and gave them each $20,000 in severance pay d. Ahmed's sales employees earn an average annual commission of $50,000 e. Amanda spends $5,000 per year on supplemental health insurance for each of her employees