P $3.00 $2.66 $2.00 10/1 So 130 150 bb bb Figure two: effect of excise tax on supply and demand Q QUESTION #19: a) a. b. C. a. b. C. Before the Tax: Price the Consumer Pays = Price the Producer Receives = Quantity = After the Tax, Price the Consumer Pays = Price the Producer Receives = Tax per unit =

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
P
$3.00
$2.66
$2.00
18. You are in the business of producing and selling hamburgers, French fries, pizza, and ice cream. The
mayor of your city plans to impose a sales tax on one of these products. Based on the elasticities:
j.
k.
Which of these goods would your customers least like to be taxed?
Which of these goods would your customers prefer to be taxed?
B
S₁
So
130 150
bb bb
Figure two: effect of excise tax on supply and demand
QUESTION #19:
a)
TO OU
a.
b.
C.
b)
a.
b.
C.
Before the Tax:
Price the Consumer Pays =
Price the Producer Receives =
Quantity =
After the Tax,
Price the Consumer Pays =
Price the Producer Receives =
Tax per unit =
d. Quantity =
e. Total Tax Revenue =
f. Proportion of the Total Tax Consumers Pay =
g. Proportion of the Total Tax Producers Pay =
h. Who Pays the Burden of the Tax =
i. DWL =
?
Transcribed Image Text:P $3.00 $2.66 $2.00 18. You are in the business of producing and selling hamburgers, French fries, pizza, and ice cream. The mayor of your city plans to impose a sales tax on one of these products. Based on the elasticities: j. k. Which of these goods would your customers least like to be taxed? Which of these goods would your customers prefer to be taxed? B S₁ So 130 150 bb bb Figure two: effect of excise tax on supply and demand QUESTION #19: a) TO OU a. b. C. b) a. b. C. Before the Tax: Price the Consumer Pays = Price the Producer Receives = Quantity = After the Tax, Price the Consumer Pays = Price the Producer Receives = Tax per unit = d. Quantity = e. Total Tax Revenue = f. Proportion of the Total Tax Consumers Pay = g. Proportion of the Total Tax Producers Pay = h. Who Pays the Burden of the Tax = i. DWL = ?
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