7. Effect of a tax on buyers and sellersThe 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)504540353025201510500Tax WedgeDemand50 100 150 200 250 300 350QUANTITY (Cases of craft beer)Supply400450 500? Using your answers from the previous 1.92 alculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticityof demand and supply over the relevars using the midpoint method. Enter your results in the following table.BuyersSellersTax Burden(Dollars per case) ΕΙ:BuyersSellers0.52The tax burden falls more heavily on the side of the market that isTax Burden(Dollars per case)BuyersSellers1.04Ela2.63Using your answers from the previousalculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticityof demand and supply over the relevar 0.38 s using the midpoint method. Enter your results in the following table.2.631.320.52The tax burden falls more heavily on the side of the market that iselastic.Using your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticityof demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.Tax Burden(Dollars per case) ElasticityThe tax burden falls more heavily on the side of the market that iselastic.lessmoreelastic.

Equilibrium refers to the point where demand curve intersects with the supply curve

he tax burden falls more heavily on the side of the market that is Buyers Sellers 2.63 sing your answers from the previous f demand and supply over the relevar 0.38 s using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per case) ΕΙ; 1.32 0.52 alculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity elastic. he tax burden falls more heavily on the side of the market that is Tax Burden (Dollars per case) Elasticity elastic. sing your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity f demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.

he tax burden falls more heavily on the side of the market that is Buyers Sellers 2.63 sing your answers from the previous f demand and supply over the relevar 0.38 s using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per case) ΕΙ; 1.32 0.52 alculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity elastic. he tax burden falls more heavily on the side of the market that is Tax Burden (Dollars per case) Elasticity elastic. sing your answers from the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity f demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For each of the following. identify where denrmd is elastic. inelastic, perfectly elWic, perfectly inelastic. or unit elastic and briefly discuss all the circumstances with graphs. Question a. Price of tea rises by 20 percent, and We quantity supply of tea increases by 10 percent b. Price of domino, pizza fells by 8 percent, and the quantity demand of the Pius increases by 24 percent.c. Price of Molla salt decreases by 13 percent and the quantity demand does not change.
Calculate, interpret and try to explain where applicable in each question, why the elasticities of demand for the following examples occur: a. The government announced an introduction of excise tax from R1 to R1.50 per bottle of beer. This increase results in an overall price increase from R9 to R10.50 per bottle to consumers. The expected tax revenue from this will be R30,000. Before the tax hike, 28,000 beers were sold. b. What will happen to the total revenue of soft drink companies if the elasticity of demand for soft drinks is higher than 1 and the price of soft drinks decreases? c. The quantity demanded of a popular magazine decreases from 10,000 copies to 6,000 per month after the publisher increased the price of a copy from R25 to R40. Total revenue from sales of a prescribed textbook on economics increased from R50,000 to R60,000 when the price of the book increased from R400 to R600 per book. Explain why.
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The quantity demanded of salt decreases when the price of pepper increases. This is an example of * own-price elasticity. supply elasticity. income elasticity. O rubber band elasticity. cross-price elasticity. If the government wants to put a per unit tax on a product so that it can raise revenue to support local schools, it would most likely accomplish this goal by doing which of the following? * O placing a tax on a good with an elastic demand. placing a tax on a good that has many substitutes. placing a tax on a good with an inelastic demand. placing a tax on a good with a perfectly elastic demand. O relying of the goodness of mankind and simply ask for donations.
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