Hi there, I'm trying to answer this economics question: (5) Should governments consider adopting a price floor on sugary drinks, instead of taxes? Why, or why not? This is what I have A price floor is the minimum price a good or service can be priced. In the context of reducing the negative externality of sugary drinks, it would only be binding and successful if the price is above the equilibrium quantity of sugary drinks.

Hi there, I'm trying to answer this economics question: (5) Should governments consider adopting a price floor on sugary drinks, instead of taxes? Why, or why not? This is what I have A price floor is the minimum price a good or service can be priced. In the context of reducing the negative externality of sugary drinks, it would only be binding and successful if the price is above the equilibrium quantity of sugary drinks.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 10PA

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1. The equilibrium price of juice was initially $1.80 per bottle, and the equilibrium quantity was 8,000 bottles per day. When the government imposed a tax of $0.50 per bottle, the price went up to $2.18 per bottle, and quantity fell by 12%. A) How much of the tax (in $/bottle) are the buyers paying? B) How much of the tax (in $/bottle) is shouldered by the sellers? C) After the tax is imposed, how many bottles will be consumed?
Suppose a local government votes to impose an excise tax of $0.90 per bottle on the sales of bottled water. (Assume that all bottles are identical and residents cannot shop elsewhere.) Before the tax the equilibrium price and quantity are $1.20 and 2000 bottles per day. After the tax is imposed, market equilibrium adjusts to a price of $1.70 and quantity of 1300 bottles per day. a. Draw the supply and demand diagram before and after the excise tax is imposed. 1.) Using the line drawing tool, plot the original and new supply curves and label the lines properly. 2.) Using the point drawing tool, indicate the original and new equilibrium points and label these points properly. Carefully follow the instructions above, and only draw the required objects. Price ($ per bottle) 3.00 2.80- 2.60- 2.40- 2.20- 2.00- 1.80- 1.60- 1.40- 1.20- 1.00- 0.80- 0.60- 0.40- 0.20- 0.00+ 0 1000 2000 Quantity (bottles per day) 10 3000
Suppose a local government votes to impose an excise tax of $1.00 per bottle on the sales of bottled water. (Assume that all bottles are identical and residents cannot shop elsewhere.) Before the tax the equilibrium price and quantity are $1.20 and 1900 bottles per day. After the tax is imposed, market equilibrium adjusts to a price of $1.80 and quantity of 1400 bottles per day. a. Draw the supply and demand diagram before and after the excise tax is imposed. 1.) Using the line drawing tool, plot the original and new supply curves and label the lines properly. 2.) Using the point drawing tool, indicate the original and new equilibrium points and label these points properly. Carefully follow the instructions above, and only draw the required objects. CH Price ($ per bottle) 3.00- 2.80- 2.60- 2.40- 2.20- 2.00- 1.80- 1.60- 1.40- 1.20- 1.00- 0.80- 0.60- 0.40- 0.20- 0.00 0 1000 2000 Quantity (bottles per day)
need help with question 2 (a) Draw the demand and supply curves from the data in Table 1. (b) What is the equilibrium quantity demanded and supplied? The government now imposes a specinc tax of £3 per unit. (c) Show the effect of this on the diogram (d) Whot is the new equilibrium quantity demanded and supplied? (e) What is the new equilibrium price?' (f What is the incidence of tax per unit on i) the consumer and (i) the producer? (g) What is (1) the tax per unit and (i) total government revenue from the tox? (h) By how much will the before tox revenue or producers changer
Suppose a $1 excise or commodity tax is placed on the purchasers of cans of soda. Use the graph to illustrate the impact this tax would have on the soda market and answer the questions. Be certain to shift the entire curve, endpoint to endpoint. Price per can (5) 10 9 8 7 3 2 1 0 1 deadweight loss: $ 0123456789 10 11 12 13 14 15 16 17 18 19 20 Cans of soda per day (in tens of thousands) Calculate the deadweight loss of the tax. Enter the answer in thousands. Supply Demand deadweight loss: $ 0123456789 10 11 12 13 14 15 16 17 18 19 20 Cans of soda per day (in tens of thousands) Demand Calculate the deadweight loss of the tax. Enter the answer in thousands. The tax would affect a household's Choose the answer that best describes the impact this tax would have on a household's economic income and whether it would cause a large change in the household's consumption of soda. This sort of change in behavior is called tax shifting. O uses side, but tax shifting is not likely to occur. O…
41. The Government decides that it is time to reduce air pollution by reducing the usage of gasoline. They impose a 1000 VND tax on each liter of gasoline sold. a.Should they impose this tax on producers or consumers? Explain carefully using a supply-and-demand diagram. b.If the demand for gasoline were more elastic, would this tax be more effective or less effective in reducing the quantity of gasoline consumed? Illustrate your answers with a diagram.
Question 7 Read the following scenario and answer the questions that follow. Scenario 4 In the market for cigarettes the impact of a specific excise tax of R10,00 is depicted in the diagram below. D ST Тах E 55,40 50,00 45,40 E2 21,00 ST S 11,00 Q 50 120 150 200 Packets per week (thousands) In the absence of any excise tax, a packet of cigarettes cost R50,00 and the equilibrium quantity is 150 000 packets per week. For scenario 4, discuss the impact of a specific excise tax of R10,00 in the market for cigarettes with reference to the provided diagram. Your discussion should incorporate the change in price received by suppliers and paid by consumers owing to the imposition of the specific excise tax. 7.1. Price per packet (R)
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?
EOC 9.01 If the government decides to increase the tax on gasoline from $0.10 to $0.12 per litre, what happens to the deadweight loss from this tax? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. It rises by more than 20%. a b It rises by less than 20%. It rises exactly 20%. Deadweight loss will not change.
Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per gallon.a. What happens when government imposes a tax of 60 cents per gallon on sellers? b. How would such a tax affect the market for gasoline i.e. what is the new equilibrium? c. On whom does the incidence of the tax fall more heavily? d. How much government revenue will be generated by the excise tax? e. What happens when government imposes a tax of 60 cents per gallon on buyers? f. How would such a tax affect the market for gasoline i.e. what is the new equilibrium?
e. What happens when government imposes a tax of 60 cents per gallon on buyers?
Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: a. The new equilibrium quantity of soft drinks bought and sold would be ___________ million liters. b. The new equilibrium price paid by buyers of soft drinks would be $__________ per liter. c. The new equilibrium price received by sellers (after-tax) would be $__________ per liter.