Consider the market in the figure where D1denotes demand and S1 denotes supply. When aunit tax of 15 is imposed on sellers in the market,the price paid by consumers(increases or decreases) toandsellersthe price received by(increases or decreases) toPrice65 A6055501540353025S₁₂2015D₁1050050100150200250300350100Quantity

Consider the market in the figure, where D1 denotes demand and S1 denotes supply. When a unit tax of…

Answered: Consider the market in the figure 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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Price $150 200 250 300 350 400 450 500 550 600 650 1. Equilibrium price $350 2. Quantity 50 3. Consumer Surplus? 6250 4. Producer Surplus? 6250 500 7. Remove the tax. Imposes a price floor $100 below the equilibrium price a Fiquilibrium price $350 and quantity? 50 Quantity Demanded 100 90 5. What is the total surplus? 12500 6. Suppose a $200 unit tax is placed on the good being sold. How much tax revenue is to be made? 4000 b. Resulting amount of surplus/shortage if any (0 if none) 0 8. Remove the price floor Impose a price ceiling $50 below the equilibrium price a Equilibrium price $350 and quantity? 50 b. Resulting amount of surplus/shortage (0 if none) o 80 70 60 50 40 30 20 10 0 Quantity Supplied 10 20 30 40 50 60 70 80 90 100 . How much deadweight loss is created (0 if none)?
1. The demand for the product S is Q = 500 – 8P and its supply is Q = 200 + 4P. The good is currently untaxed, but the government needs to raise tax by taxing per unit of the good. a. Calculate excess burden for the product S. b. Calculates marginal excess burden for the product S? %3D The exact amount of the tax is not specified.
What are the implications of such a subsidy for economic efficiency and Consumer and Producer Surplus?
Figure 8-8 Suppose the government imposes a $10 per unit tax on a good. Price 24 22- 20 18 Supply 16+ 14+ 12 F G 10+ H 6- 4- K M Demand 3 69 12 15 18 21 24 27 30 33 36 39 Quantity Refer to Figure 8-8. One effect of the tax is to O reduce producer surplus from $96 to $24. O create a deadweight loss of $72. O reduce consumer surplus from $180 to $72. All of the above are correct. 00 2.
The vertical distance between points A and B represents a tax in the market. 22- Price 222 20 18- 16 14 12- 22 10 8 9 Supply Demand 100 200 300 400 500 600 700 800 900 1000 Quantity Refer to Figure 8-6. Total surplus with the tax in place is
Suppose the graph shows the market for wheat. The equilibrium price is $25. To support incomes of farmers, the government imposes a price floor of $35. What is the cost of the program borne by the government? 50 45 40 35 30 25 20 15 10 5 Price - 100 200 300 400 500 600 700 800 Quantity Multiple Choice O O $14.000 $12.000 $21,000 $15,000
Figure 8-5 Suppose that the government imposes a tax of P3 - P1. P4 P3 P2 Pl Price F. 4 CO OA. O F G D+H. 02 OC+H. 2 H I Q1 Refer to Figure 8-5. The tax causes a reduction in producer surplus that is represented by area Supply Demand Quantity
6. Use the following graph shown to fill in the table that follows. Consumer surplus Producer surplus Tux revenue Total surplus Price P3 P₁ P₂ I B D WITHOUT TAX CIE WITH TAX Quantity CHANGE
M3
What is the price elasticity of demand(Using the Midpoint method) when the price changes from $10 to $13? If the Government imposes a tax of $6 per burrito, how many burritos will be sold in the market?
1. Price $152 $144 $136 $128 $120 $112 $104 $96 $88 $80 572 S64 $56 $48 $40 $32 CORNW 524 $16 $8 SO 0 25 50 75 100 1₁ 125 150 - - Supply 175 200 Quantity 225 Demand A. Calculate consumer surplus at the equilibrium price and quantity B. Calculate producer surplus at the equilibrium price and quantity D. Calculate total surplus at the equilibrium price and quantity D. Shade the area of the graph that corresponds to total surplus 250 275 300 325 350 375
Can you explain why this isn’t 60? I thought it was base times height times 1/2

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