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Q2: Suppose the
p = 50 - 2q………………1
and the supply function is
p = 10 + 3q…………….2
c) Suppose the government imposes a per unit tax of $5 on producers, what would be the effect of this tax on market clearing
d) Find the consumer and producer tax burden.
e) Calculate the tax revenue that the government received.
Only solve d and e
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Solved in 6 steps
- Q4: Consider the market (supply and demand) for Wheat.Qd = 100 - 0.6P…………1Qs = -30 + 2P……...…...2a. Find the market equilibrium price and quantity?b. Find the market equilibrium price and quantity After imposing an ad valorem tax on production by 5% of good price.c. Find the market equilibrium price and quantity if producers receive a production subsidy of 10 SR per unit produced.Hand written solutions are strictly prohibitedanswer just question d
- Lesson 11 Question 1The market demand function for corn is Q = 30 - 2P. The market supply function is QS = 5P-2.5, both measured in billions of bushels per year. Suppose the government imposes a $8.10 tax per bushel. What will be the effects on aggregate surplus, consumer surplus, and producer surplus? What will be the deadweight loss created by the tax? Instructions: Round your quantities to the nearest whole number. Round prices, surpluses and deadweight losses to 2 decimal places. a. What are the initial equilibrium effects? Complete the table below. Initial equilibrium price Initial equilibrium quantity Initial equilibrium consumer surplus Initial equilibrium producer surplus After-tax equilibrium price After-tax equilibrium quantity After-tax equilibrium consumer surplus After-tax equilibrium producer surplus $ Government revenue After-tax equilibrium aggregate surplus Deadweight loss Before the tax Initial equilibrium aggregate surplus b. What are the effects after the government imposes a $8.10 tax…6. The long-run supply curve for a particular type of kitchen knife is a horizontal line at a price of $3 per knife. The demand curve for such a kitchen knife is Q,=50– 2P where Q, is the quantity of knives demanded (in millions per year) and P is the price per knife (in dollars). a. What is the equilibrium output of such knives? b. If a tax of $1 is imposed on each knife, what is the equilibrium output of such knives? (Assume the tax is collected by the government from the suppliers of knives.) c. After the tax is imposed, you buy such a knife for $3.75. Is this the long- run equilibrium price?
- 6. Who should pay the tax? The following graph shows the labor market for research assistants in the fictional country of Collegia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 200. Suppose the government has decided to institute a $2-per-hour payroll tax on research assistants and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of labor…1. The demand and supply functions of beans are respectively given as 20QB +15PB-5PR=6000 and 10QB-15PB=1200. Similarly, the demand and supply of rice are Qr+Pr-PB=250 and 3Qr-7PR=710. Pɛ and PR are prices of beans and rice. QB is demand of beans and Qr is demand of rice. Find the equilibrium price and quantity of beans and rice. Are rice and beans substitute? Explain your answer.Price (dollars per gallon) S2 $5.50 3.50 2.50 D Quantity (millions of gallons per month) 30 40 45 Assume the graph above illustrates a new tax put into the market for soft drinks. S2 is the supply curve with the $2 tax in place. What price would consumers pay if the tax was placed on consumers instead of producers? 1) $2.00 O 2) $3.50 3) $2.50 4) $1.50
- A66. Who should pay the tax? The following graph shows the labor market for research assistants in the fictional country of Universalia. The equilibrium wage is $10 per hour, and the equilibrium number of research assistants is 250. Suppose the government has decided to institute a $4-per-hour payroll tax on research assistants and is trying to determine whether the tax should be levied on the employer, the workers, or both (such that half the tax is collected from each side). Use the graph input tool to evaluate these three proposals. Entering a number into the Tax Levied on Employers field (initially set at zero dollars per hour) shifts the demand curve down by the amount you enter, and entering a number into the Tax Levied on Workers field (initially set at zero dollars per hour) shifts the supply curve up by the amount you enter. To determine the before-tax wage for each tax proposal, adjust the amount in the Wage field until the quantity of labor supplied equals the quantity of…Please answer both questions 2d and 2e - part 1
