Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay (Pairs of jeans) (Dollars per pair) Price Sellers Receive (Dollars per pair) Before Tax After Tax Using the data you entered in 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. Buyers Sellers Tax Burden (Dollars per pair) Elasticity The burden of the tax falls more heavily on the elastic side of the market.

Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay (Pairs of jeans) (Dollars per pair) Price Sellers Receive (Dollars per pair) Before Tax After Tax Using the data you entered in 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. Buyers Sellers Tax Burden (Dollars per pair) Elasticity The burden of the tax falls more heavily on the elastic side of the market.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A local government is seeking to impose a specific tax on hotel rooms. The price elasticity of supply of hotel rooms is 3.5, and the price elasticity of demand is 0.3. If the new tax is imposed, who will bear the greater burden-hotel suppliers or hotel consumers? The hotel consumers pay percent and hotel suppliers pay percent of the tax. (Enter your responses rounded one decimal place.)
Use the concept of Price Elasticity of Demand to explain why the public policy recommendation of raising taxes on cigarettes causes State revenues to rise while also effectively deterring smoking among young people. Be sure to consider availability of substitutes and the effect of the percentage spent of each buyer’s budget when formulating a response. Who bears the brunt of the tax – the consumer or the producer? Are there any potential negative side effects of increasing taxes on cigarettes?
The bar graph below shows the percentages of income spent on food (i.e., the portion of a consumer's budget devoted to food spending) and the elasticities of demand (in absolute value) for several countries' residents. [Click on the bar graph to open a PDF viewable version in another tab.] Malawians Haitians Bangladeshis Indians Brazilians Koreans. Greeks Italians Australians French Canadians Americans Percentage of Income spent on Food 17% 15% 14% 12% W 31% 28% 35% 40% X 56% Elasticity of Demad 66% 81% 75% According to the bar graph, which of the answer choices is correct? Malawians spend less money on food than Australians. French spend less money on food than Brazilians. Bangladeshis spend a larger percentage of their income on food than Americans. O Canadians spend a larger percentage of their income on food than Koreans
#5 The government imposes an excise tax on house paint. The house paint tax incidence takes place within a market where the supply of house paint is perfectly inelastic and the demand for house paint is perfectly elastic. The excise tax is paid by the government. producers of house paint. consumers of house paint.
The table below shows the demand schedule for bagels. Price Quantity Demanded ($/pack) (# of Packs) $12 0 8 12,000 6 18,000 4 24,000 2 30,000 0 36,000 What is the price elasticity of demand when the price increases from $0 to $2? _________ Is demand elastic or inelastic? ___________ What is the price elasticity of…
Suppose that a large city has dozens of apartment complexes that are nearly identical in terms of size, age, and amenities. Assume the demand curve for an apartments at an individual complex is perfectly elastic. If the city places an excise tax on apartments, who will pay the tax? What will happen to the quantity demanded. Explain and show graphically. For graphical purposes, assume the supply of apartments is upward sloping.
An experiment is conducted that provides the data in the accompanying table. Toll rate Number of vehicles using the tollway per day $8 10,000 $6 12,000 a. What is the absolute value of price elasticity when the toll rate decreases from $8 to $6? Round to the nearest hundredth. c. What is the change in total revenue when the toll is decreased from $8 to $6?
The price elasticity of demand for beer among young adults (age 18 to 24) is about 1.30, and the number of highway deaths is roughly proportional to the group’s beer consumption. If a state imposes a beer tax that increases the price of beer by 20%, by how much will the number of highway deaths among young adults decrease?
Suppose Via Rail asked government authorities for permission to increase its commuter rates by 20 percent. The railroad argued that declining revenues made this rate increase essential. Opponents of the rate increase contended that the railroad's revenues would fall because of the rate hike. It can be concluded that: both groups felt that the demand was elastic but for different reasons. both groups felt that the demand was inelastic but for different reasons. the railroad felt that the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic. the railroad felt that the demand for passenger service was elastic and opponents of the rate increase felt it was inelastic.
7. Effect of a tax on buyers and sellers The following graph shows the weekly market for craft beer in some hypothetical economy. Suppose the government levies a tax of $11.60 per case. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE (Dollars per case) 50 45 40 35 30 25 20 15 10 5 0 0 Tax Wedge Demand 50 100 150 200 250 300 350 QUANTITY (Cases of craft beer) Supply 400 450 500 ?
How does elasticity affect the burden of a tax? (max: 4 sentences)
To encourage people to stop smoking the government of a country introduces an indirect tax of 20% on the price of cigarettes(Currently 10$ per packet). The price elasticity of demand for cigarettes in the country is estimated to be 0.6. Describe the likely impact the tax will have on a, the demand for cigarettes b, government revenue