ewensealFigure 4-9S2$1.40S,1.201.00D90 100Quantity (billions of gallons)Refer to Figure 4-9. The market for gasoline was initially in equilibrium at point b and a $.40 excise tax is illustrated.What does the triangular area abc represent?O the revenue the government derives from the taxthe tax paid by consumersthe tax paid by producersthe deadweight loss (or excess burden) created by the taxPrice

From the figure: Initially market runs at point b where equilibrium price is $1.20 and equilibrium…

Answered: ewenseal Figure 4-9 S2 $1.40 S, 1.20…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The following graph depicts the impact in a market after the government imposes an excise tax. $16 Stafer tax a So before tax $10 PE $9 PE, $7 PE, $6 $3 Q Q5 1,000 1,400 Q 4,000 What is the value of the deadweight loss from taxation? $600 O $400 O $200 O $300 P.
Figure 8-5 Price Pa P₁ P₂ 0 < B D 41 F -Tax- G 9₂ a. A b. C+EX C. B+C Od. D+E C E H Q₁ Quantity Refer to Figure 8-5. Assume the tax was levied on the producer. Which area represents the reduction in consumer surplus?
QUESTION 10 Using the attached table, once the tax is implemented, the tax revenue will be be Quantity MB 520 525 530 535 540 545 550 164 160 156 152 148 144 140 136 MC 80 90 100 110 120 130 140 555 150 Note: MB designates the marginal benefit and reflects the values on the demand curve. MC is the marginal cost and designates the values on the supply curve. O $18,375, $1,750 $70, $35 O $36,750, $875 O $525, $1,750 MB-Tax (Amount producer receives) 94 90 86 and the deadweight loss will 82 78 74 70 66
Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $7 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $10 per case, and producers receive $4 per case (after paying the tax). A. The amount of the tax on a case of cola is ___ per case B. Of this amount, the burden that falls on consumers is ___ per case C. 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.
a. area A +area B + area D. b. area A+ area B+ area C. Ocarea A+ area B. d. area D only. Figure 4-10 A ** B D Price Quantity Refer to Figure 4-10. The accompanying graph shows the market for a good before and after an excise tax is imposed. The total tax revenue generated is indicated by
Figure 8-1 P' P" P tPrice J K L Zi I+Y. M K+L. N ****** ...... B Refer to Figure 8-1. Suppose the government imposes a tax of P - P". The tax revenue is measured by the area J+K+L+M. Supply I+J+K+L+M+Y. Demand Quantity
Using the supply and demand data for wheat below, what would happen if the government placed a $3 per bushel tax on wheat? Bushels demanded 45 50 56 61 67 Price per bushel $6 $5 $4 LA LA LA $3 $2 Bushels supplied 77 73 68 61 57 O the producer price would fall, the consumer price would rise, and the quantity sold would increase. The producer price would fall, the consumer price would rise, and the equilibrium quantity would fall O Both the consumer price and the producer price would rise the consumer price would rise by less than $3 while the producer price would fall by more than $3 O the equilibrium consumer price would rise by $3
Figure 4-5. The graph shows the impact of an excise tax. Price $2.00 1.50 1.00 .50 B A M E H K I 350 F 500 Quantity tax G Stax $1.00 for consumers and $0.50 for producers $1.00 for consumers and $1.00 for producers. $0.25 for consumers and $0.75 for producers. $0.50 for consumers and $0.50 for producers. S DSR Refer to Figure 4-5. The amount of the actual tax burden paid by consumers and producers is
Price (dollars per hour) 7.00 6.60 6.00 5.60 5.00 0 1 2 3 4 5 6 7 8 Quantity (thousands of frisbees) Figure 6.3.1 OB) $5.60. S + tax Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed. On each frisbee, the sellers' burden of the tax is OA) $0.60. OC) $0.40. S OD) $6.60.
Suppose that the government decides to charge cola consumers an excise tax. Before the tax, 12 million cases of cola are sold every month at a price of $3.50 per case. After the tax, 6million cases of cola are sold every month; consumers pay $4.00 per case and producers receive $2.00 per case. a. What is the excise tax on cola?b. On whom does the incidence of the tax fall more heavily?c. How much government revenue will be generated by the excise tax?
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 5,000 cases of beer are sold every week; consumers pay $6 per case, and producers receive $3 per case (after paying the tax), The amount of the tax on a case of beer is S burden that falls on producers is True per case. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O False per case. Of this amount, the burden that falls on consumers is 5 per case, and the
Ch 8: Practice Sheet 2 Figure 8-5 Price 922 16 1. Refer to Figure 8-5 above. What happens to consumer surplus when a tax is imposed in this market? a. It falls by $900 b. It falls by $1800 c. It falls by $2,700 d. It falls by $3,600 2. Refer to Figure 8-7 below. A tax levy forced consumers to pay a price of $18 per unit. What is tax rate (size) imposed in this market? a. $10 ²00 b. $18 c. 58 d. $12 3. Refer to Figure 8-7 below. After the tax levy, the burden of tax on consumers is a. $18 b. $10 c. $8 d. 56 4. Refer to Figure 8-7 below. After the tax levy, the burden of tax on producers is a $10 b. $8 c. 56 d. 54 G a 5. Refer to Figure 8-7. One effect of the tax is to a. reduce consumer surplus from $60 to $24. c. create a deadweight loss of $24. 6. Refer to Figure 8-7. One effect of the tax is to a. reduce the quantity demanded from 8 to 4. c. create a tax revenue of $40. 10 Supply Demand 14 16 2 b. reduce producer surplus from $32 to $8. d. All of the above are correct. b. reduce the…

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