Suppose that the government imposes a tax on pizzerias of $1.50 per pizza sold.On the following graph, use the grey segment (star symbols) to show the tax wedge that forms at the new quantity sold because of the tax. Then usethe tan polygon (dash symbols) to indicate the tax revenue generated by this tax. Then use the green point (triangle symbol) to shade the area thatrepresents consumer surplus, and the purple point (diamond symbol) to shade the area that represents producer surplus. Finally, use the black point(plus symbol) to indicate the deadweight loss in this market. (Hint: If the value for any of these graphical objects is zero, leave that element on thepalette.)Price of Pizza (Dollars)109876543210Demand0123456 7Quantity of Pizza (Thousands)8910Tax WedgeSupply Tax RevenueAConsumer Surplus◇Producer SurplusC↓Deadweight Loss?2:03 PM Indicate whether each of the areas listed in the following table increased, decreased, or remained the same as a result of the tax.UnchangedConsumer SurplusProducer SurplusGovernment Tax RevenueDeadweight LossIf the tax were removed, pizza eaters and sellers would be better off, but the government would lose tax revenue. Suppose that consumers andproducers voluntarily transferred some of their gains to the government.True or False: All parties (including the government) could be made better off with this transfer than they were with a tax.O TrueIncreased DecreasedOFalse

An economy in equilibrium maximizes the producer and consumer surplus rate. However, if the…

Indicate whether each of the areas listed in the following table increased, decreased, or remained the same as a result of the tax. Increased Decreased Unchanged O Consumer Surplus Producer Surplus Government Tax Revenue Deadweight Loss If the tax were removed, pizza eaters and sellers would be better off, but the government would lose tax revenue. Suppose that consumers and producers voluntarily transferred some of their gains to the government. O True or False: All parties (including the government) could be made better off with this transfer than they were with a tax. O True O False

Indicate whether each of the areas listed in the following table increased, decreased, or remained the same as a result of the tax. Increased Decreased Unchanged O Consumer Surplus Producer Surplus Government Tax Revenue Deadweight Loss If the tax were removed, pizza eaters and sellers would be better off, but the government would lose tax revenue. Suppose that consumers and producers voluntarily transferred some of their gains to the government. O True or False: All parties (including the government) could be made better off with this transfer than they were with a tax. O True O False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 10 Using the attached table, once the tax is implemented, the tax revenue will be be Quantity MB 520 525 530 535 540 545 550 164 160 156 152 148 144 140 136 MC 80 90 100 110 120 130 140 555 150 Note: MB designates the marginal benefit and reflects the values on the demand curve. MC is the marginal cost and designates the values on the supply curve. O $18,375, $1,750 $70, $35 O $36,750, $875 O $525, $1,750 MB-Tax (Amount producer receives) 94 90 86 and the deadweight loss will 82 78 74 70 66
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If the government wants to increase the tax revenue they collect from sellers, then it should O Tax goods that have low elasticity of demand and high elasticity of supply. O Tax goods that have high elasticity of demand and supply. Tax goods that have high elasticity of demand and low elasticity of supply. O Tax goods that have low elasticity of demand and supply.
7. Taxation - An algebraic approach Suppose the supply of a good is given by the equation Q1,200P-1,200, and the demand for the good is given by the equation QD 2,400-400P, where quantity (Q) is measured in millions of units and price (P) is measured in dollars per unit. The government decides to levy an excise tax of $1.00 per unit on the good, to be paid by the seller. Calculate the value of each of the following, before the tax and after the tax, to complete the table that follows: 1. The equilibrium quantity produced 2. The equilibrium price consumers pay for the good 3. The price received by sellers Equilibrium Quantity (Millions of units) Equilibrium Price per Unit Paid by Consumers Price per Unit Received by Sellers Before Tax The government receives After Taxi Given the information you calculated in the preceding table, the tax incidence on consumers is on producers is per unit of the good: per unit of the good, and the tax incidence in tax revenue from levying an excise tax of…
(a) Show the market for housing in equilibrium on a diagram, where demand is less elastic than supply, andlabel the respective consumer and producer surpluses. Discuss whether this market is Pareto efficient. (b) Assume that the State Government imposes a per-unit tax on the sellers of houses. A new diagram,shows the imposition of this tax on the market for housing. Does the imposition of this tax cause a Paretoimprovement to the market, explain? (c) Is the tax imposed in part (b) effective for the collection of Government revenue? Justify your answer withreference to your diagram in part (b).
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 5,000 cases of beer are sold every week; consumers pay $6 per case, and producers receive $3 per case (after paying the tax), The amount of the tax on a case of beer is S burden that falls on producers is True per case. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O False per case. Of this amount, the burden that falls on consumers is 5 per case, and the
If the government imposes a $5 excise tax on the production of wine, then from the perspective of wine consumers, the "effective" or after-tax supply curve for wine wil shift down vertically by more than $5 Mp verticaly by exactly SS down vertically by exoctly $5 dwn vertically hv less than $ atly Inv less then 15 left herleaty
The government is worried about high rates of cigarette smoking and so it's considering implementing a cigarettes tax. The government knows that the demand for cigarettes is very inelastic, and the supply of cigarettes is perfectly elastic. Which of the following statements are true? (Select all that apply.) O a. It doesn't matter how the tax is implemented. O b. There are positive externalities associated with smoking. O c. Smoking will decrease only slightly in the short-run. O d. Regardless of how the tax is implemented, consumers will pay the full amount of the tax. O e. The government will collect more revenue if the tax is on the suppliers. O f. Consumers and suppliers will split the burden of the tax. O g. Smoking will decrease more if the tax is the on the suppliers. O h. A tax on cigarettes is one way to make smokers internalize the cost of the externalities associated with smoking. O i. Smoking will decrease more in the long-run than in the short-run. O j. Smoking will…
P P=7 On the following diagram if there is a tax of $3 dollars imposed on sellers, what is the tax burden on sellers? $1 O $2 $3 $7