Consider the economy of Pomistan, where citizens consume only apples. Assume that apples cost $1 each, and each person can buy at most 5,000apples. The government has devised the following tax plans:Plan AConsumption up to 1,000 apples is taxed at 20%.Consumption higher than 1,000 apples is taxed at 80%.Plan BConsumption up to 2,000 apples is taxed at 30%.Consumption higher than 2,000 apples is taxed at 10%.Derive the marginal and average tax rates under each tax plan at the consumption levels of 500 apples, 1,500 apples, and 2,500 apples, respectively.Fill in the following table with your results.Consumption Level500 apples1,500 apples2,500 applesPlan AMarginal Tax Rate20%, 40%,80%,56%20%,40%,80%,56%20%, 40%, 80%,56%Plan BMarginal Tax RateAverage Tax Rate20%,40%,80%,56%20%, 40%,80%,56%20% 40%, 80%,56%Average Tax Rate26%, 22%, 10%, 30%26%, 22%, 10%, 30%26%, 22%, 10%, 30%26%, 22%, 10%, 30%26%, 22%, 10%, 30%26%, 22%, 10%, 30%

Let's calculate the marginal and average tax rates under each tax plan at the specified consumption…

Answered: Consider the economy of Pomistan, where…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Tax equivalency worksheet
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 Some economists believe that a sales tax, in general, is undesirable. Explain. Despite this, why do most countries still impose a tax on cigarette? Explain plausible arguments.
The government is considering levying a tax of $120 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DLDL (on the first graph), and the demand for smartphones is shown by DSDS (on the second graph). Suppose the government taxes leather jackets. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S+TaxS+Tax) shifted up by the amount of the proposed tax ($120 per jacket). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. Instead, suppose the government taxes smartphones. The following graph shows the annual supply and demand for this good, as well as the supply curve…
Consider the following supply and demand curves Price = 35-4*Q Price = 3*Q Suppose the government places a 7-dollar tax on producers. Doing so would generate _____ dollars of revenue. Suppose now instead of putting a 7-dollar tax on producers, the government put the 7-dollar tax on consumers. Doing so would generate _______ dollars of revenue. In this case, consumers would pay _____ percent of the tax. Give typed answer ASAP with proper step by step explanation. Will give upvote only for the correct answer . Thank you .
A tax on the sellers of cheese increases the size of the cheese market. has no effect on the size of the cheese market. may increase, decrease, or have no effect on the size of the cheese market. decreases the size of the cheese market.
Government is known to utilize a product's elasticity measures to set taxes and subsidies. Use this information to set policy on one of the following products: tobacco products, petroleum products, agriculture products, or medical products according to your goal. Research the government's tax/subsidy policy in these areas and any objectives of the tax policy. State your goal, your prescribed action, and why you believe it will work using the information you found.
If the burden of a tax on sugary drinks is borne mostly by consumers, it must be the case that: a) The demand for sugary drinks is much less elastic than their supply. b) Both the demand for, and the supply of, sugary drinks is inelastic. c) Both the demand for, and the supply of, sugary drinks is elastic. d) The demand for sugary drinks is much more elastic than their supply.
Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 20 million cases of beer were sold every month at a price of $4 per case. After the tax, 13 million cases of beer are sold every month; consumers pay $7 per case, and producers receive $2 per case (after paying the tax). The amount of the tax on a case of beer is per case. Of this amount, the burden that falls on consumers is per case, and the burden that falls on producers is per case. 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. True False
Questions 31-35 concern the supply and demand equations below: QD Qs = P – 3 = 27 – 2P Find the market equilibrium price and quantity. 31. P* = 32. Q* Now a $3 tax is imposed on buyers and the market adjust to its new equilibrium. 33. Рp 34. tax revenue = 35. DWL
The figure below shows a market of good C. Suppose that the government levied a tax on C. Suppose that the consumers’ tax incidence is 15 and the price sellers receive is 8 when the size of the tax is T. Answer the value of T. Hint: Remember the relationship between the tax incidences and the size of tax.
Consider the following demand and supply functions. Demand: D(p) = q = 188-11p and Supply: S(p) = q=31+ 13p a.) Assume there are no taxes imposed. Find the equilibrium price and quantity. Equilibrium Price (Round your answer to the nearest cent.) 8. Equilibrium Quantity (Round your answer to the nearest whole number.) I 9. b.) Assume there is a 14% tax on the consumer, find the new equilibrium price and quantity. New Equilibrium Price (Round your answer to the nearest cent.) New Equilibrium Quantity (Round your answer to the nearest whole number.) 4. c.) What portion of the tax is paid by the consumer? (Round to the nearest cent.) $ 9. d.) What portion of the tax is paid by the producer? (Round to the nearest cent.) e.) What is the total tax is paid to the government? (Round to the nearest cent.) 9.
The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. Demand Supply QUANTITY (Binkies) 18 QUANTITY (Blinkies) Complete the following table, given the information presented on the graph. Result Value Price consumers pay before tax Per-unit tax S S Equilibrium quantity before tax In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept A B C D E F Consumer surplus before the tax is imposed ☐ ☐ ☐ ☐ Producer surplus after the tax is imposed O ☐ ☐ D 0 Tax revenue after the tax is imposed D ☐ ☐ 0 Grade It Now Save & Continue

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