Figure 8-1 P PRICE & K L M N QUANTITY consumer surplus after the tax. Refer to Figure 8-1. Suppose the government imposes a tax of P-P". The area measured by L+M+Y represents consumer surplus before the tax. Supply O producer surplus after the tax. O producer surplus before the tax. Demand

Figure 8-1 P PRICE & K L M N QUANTITY consumer surplus after the tax. Refer to Figure 8-1. Suppose the government imposes a tax of P-P". The area measured by L+M+Y represents consumer surplus before the tax. Supply O producer surplus after the tax. O producer surplus before the tax. Demand

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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According to Graph 8-1, after the tax is levied, producer surplus is represented by area:
1. Consider the market for candy bars given below. Suppose that the government imposes a tax of $2 per candy bar in this market. Show on the graph and calculate the following: Price 5 $4.50 $4 $3.50 Supply 53 $2.50 $2 $1.50 $1 Demand S0.50 400 800 1200 1600 2000 2400 2800 3200 3600 4000 Candy Bars A. The quantity the market will produce with the tax. B. The government revenue from the tax. C. The deadweight loss from the tax. D. The consumer surplus with the tax. E. The producer surplus with the tax.
Price Tax Amount of the tax C. Quantity Click to view larger image. Look at the provided figure. What area(s) represent the deadweight loss after the tax? O A + B B + C O E+ F B.
Consumer and Producer surplus Stax P $100 $70 $50 $45 $X $5 D 40 60 Assume an excise tax that has caused a decrease in Supply as shown on the graph above Show all work. а. How much is the tax per- unit b. How much is the value of X (intercept of the green line). How do you describe what that value is? C. How much is the consumer surplus before the tax? d. How much is producer surplus before the tax? е. How much is the consumer surplus after the tax? f. How much is producer surplus after the tax? g. How much is the deadweight loss as a result of the tax
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.6 and 0.8 respectively. a. Suppose the government imposes a per-unit tax on the cigarette sellers. Who, buyers or sellers, would share a heavier tax burden? Explain your answers without calculation. b. Suppose the government imposes a per-unit tax of $40 on the cigarette sellers. By how much would buyers and sellers of cigarettes share the tax burden respectively? Show your calculation. c. Suppose many small sellers, such as newsstands, complain the heavy tax burden borne by them. Would it be better to these small sellers if the government decides to impose a $20 per-unit tax on both the buyers and the sellers of cigarette? Explain.
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If buyers pay more of a tax than do the sellers اختر أحد الخيارات a. demand is more elastic than supply O .b. supply is more elastic than demand O C. None of the above answers is correct O .d. the equilibrium price paid by buyers rises by less than half the amount of the tax „e. the amount of tax revenue collected by the government is almost zero
7.7 pleaase explain
ols 4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for champagne, which is shown on the following graph. 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 case) 22***RES 40 35 Show Transcribed Text AX REVENUE (Dolan) 018 27 345 54 63 72 81 00 QUANTITY (Cases) Suppose the government imposes a $10-per-case tax on suppliers. At this tax amount, the equilibrium quantity of champagne is [ . 648 576 504 432 360 204 3214 144 72 D Supply . Demand Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per case. (Hint: To find the equilibrium quantity…
The following graph represents the demand and supply for pinckneys (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 A 16, 18 21.00 18.00- D E 15.00 F 12 16 QUANTITY (Pinckneys) PRICE (Dollars per pinckney)
Question 5 Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and ST is the supply curve after the tax. Price 12 10 - Qua (a) For the market for cioarettes without the tax, Indicate: (0) Price paid by consumers Price paid by producers Quantity of cigarettes sold Buyer's reservation price Sellers reservation price
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