Effect of a tax on buyers and sellers The following graph shows the daily market for wine when the tax on sellers is set at $0 per bottle. Suppose the government institutes a tax of $23.20 per bottle, to be paid by the seller. (Hint: To see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per bottle) 200 180 160 140 120 100 80 40 20 0 I + I I Demand Supply 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bottles of wine) Graph Input Tool Market for Wine Quantity (Bottles of wine) Demand Price (Dollars per bottle) 50 300.00 Supply Price (Dollars per bottle) Supply Shifter Tax on Sellers (Dollars per bottle) ? 68.00 0.00

Effect of a tax on buyers and sellers The following graph shows the daily market for wine when the tax on sellers is set at $0 per bottle. Suppose the government institutes a tax of $23.20 per bottle, to be paid by the seller. (Hint: To see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per bottle) 200 180 160 140 120 100 80 40 20 0 I + I I Demand Supply 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bottles of wine) Graph Input Tool Market for Wine Quantity (Bottles of wine) Demand Price (Dollars per bottle) 50 300.00 Supply Price (Dollars per bottle) Supply Shifter Tax on Sellers (Dollars per bottle) ? 68.00 0.00

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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@bulldogs.a.... 37,279 Q CENGAGE MINDTAP PRICE (Dollars per scooter) Homework (Ch 08) Consider the market for electric scooters. The following graph shows the demand and supply for electric scooters before the government imposes any taxes. 100 90 80 First, use the black point (plus symbol) to indicate the equilibrium price and quantity of electric scooters in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. (?) 70 60 50 40 30 20 10 0 $ Grammarly was Successfully Installed | Gramma... 4 Demand M 0 160 320 480 640 800 960 1120 1280 1440 1600 R Supply MAX 1 an % Before Tax 5 ng.cengage.com T A 6 Y AL Alabama Black history stories you may not know.... MacBook Pro & 7 + Equilibrium tv NT A A Consumer Surplus U O Producer Surplus * C + O 8 4+ 9 amagan music zoom 0…
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o Suppose the Canadian government has decided to place an excise tax of $20 per tire on producers of automobile tires. Excise taxes are also called sales or commodity taxes. Previously, there was no excise tax on automobile tires. As a result of the excise tax, producers of tires, such as Bridgestone and Michelin, are going to alter their tire prices. The graph illustrates the demand and supply curves for automobile tires before the excise tax. Please shift the appropriate curve or curves on the graph to demonstrate the impact of the new tax. What is the price consumers pay for a tire post tax? Round to the nearest 10. price paid by consumers: $ What is the price producers receive for a tire net of taxes? Round to the nearest 10. Price 150 140 130 120 110 100 90 80 70 60 50 O 1 2 3 01 4 5 Quantity 6 Supply Demad 7 8 9 10
All jurisdictions in the United States have laws against drunk driving, with penalties ranging from lost driving privileges to jail time. But in many jurisdictions, establishments can also be held liable for selling alcohol to visibly intoxicated patrons who then cause accidents. In those locales, having drunk drivers on the road is a negative externality that both consumers and producers must internalize.The effect on the supply and demand curves for alcoholic beverages is to shift both curves to the left: as drinkers moderate their intake, demand drops from DInternal to DSocial, and as bars and liquor stores refuse service to drunk patrons, supply drops from SInternal to SSocial. Which point on the graph represents the social optimum in this situation? Mark your answer using the point tool.
9. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $60 per unit on suppliers of either smart watches or yoga mats. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for smart watches is shown by Dw (on the first graph), and the demand for yoga mats is shown by Dy (on the second graph). Suppose the government taxes smart watches. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S + Tax) shifted up by the amount of the proposed tax ($60 per watch). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for smart watches. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. PRICE (Dollars per watch) 120 110 100 90 80 70 60 50 40 30 20 10 0 Smart Watches Market S+Tax Supply…
The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the government levies a tax of $11.60 per case. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE(Dollars per case) 50 45 40 35 30 25 20 15 10 0 Tax Wedge 0 10 20 30 Before Tax After Tax Buyers Sellers 40 SO 60 QUANTITY (Cases of craft beer) Demand 70 80 90 100 Complete the following table by filling in the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay (Cases of craft beer) (Dollars per case) Price Sellers Receive (Dollars per case) Supply Tax Burden (Dollars per case) Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Elasticity ? The tax burden falls more heavily…
analysis of the video poker market in Rye shows demand by the patrons is Qd=200-2P and the supply is Qs=2P now suppose that the city of Rye passes a law that requires all video poker arcades to contribute m cents to a city charitable fund for each game played on there machines, this is essentially a excise tax. In a diagram show the effect of the new law on the market ( Do not try to give a algebraic solution, just show what happens graphically and describe. Please illustrate how the tax of m shifts the specific curves. In the approach of modeling taxes and subsidies. The direction of the shift carries a specific meaning in economics. graphically indicate the incidence of taxation on consumers as well as arcade owners. Explain what incidence of taxation is and what the graph tells you the jncidence of this case.
The government is interested in imposing a tax on the local gasoline market. Using a tax modified demand, indicate in an appropriate diagram the effect of this tax on this market, labeling everything. Explain what happens to demand, supply, equilibrium price and equilibrium quantity exchanged and why. please give me correct answer with proper explanation and diagram