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In the given figure, the initial equilibrium is achieved at price of $7 and quantity of 7 units.
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- Show full solutions clearly, thanksA tax is imposed like in the figure below. This will REDUCE the producer surplus by 12 6 5 2 O24 08 18 I OI choose to use one of my three skips on this question. O 10 8 12 S+$2 tax S units.Suppose demand and supply of gasoline are given by the following linear functions: Qd = 100 - 20P Qs = 50 + 10P where Q is the quantity in millions of litres and P is the price per litre. Suppose a tax of $1.10 per litre is imposed on gasoline. The deadweight loss equals: O A. $2.13 million O B. $4.03 million OC. $3.33 million O D. $2.70 million
- Suppose that a country has 20 million households. Ten million are poor households that each have labor market earnings of $20,000 per year and 10 million are rich households that each have labor market earnings of $80,000 per year. If the government enacted a marginal tax of 10 percent on all labor market earnings above $20,000 and transferred this money to households earning $20,000 or less, would the incomes of the poor rise by $8,000 per year? O A. No. Workers in rich and poor households would work less because of the marginal tax. O B. Yes. 10% of $80,000 is $8,000; therefore, $8,000 from each rich household would be transferred to each poor household. O C. There is not enough information to determine household behavior in this case. O D. No. Only workers in rich households would work less because of the marginal tax.Suppose that the local government of Santa Fe decides to institute a tax on seltzer producers. Before the tax, 40,000 packs of seltzer were sold every week at a price of $10 per pack. After the tax, 33,000 packs of seltzer are sold every week; consumers pay $12 per pack, and producers receive $8 per pack (after paying the tax). The amount of the tax on a pack of seltzer is S burden that falls on producers is $ True per pack. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers. False per pack. Of this amount, the burden that falls on consumers is S per pack, and the28 24 20 16 12 8 4 0 P 0 4 O a) $6, buyers Ob) S6, sellers Oc) $48, buyers O d) $48, sellers 8 12 16 20 S D 24 Q 15. Based on this graph, depicting the imposition of a $6 per unit sales tax on a good, how much total revenue does the government collect, and who bears more of the economic burden of this tax - buyers or sellers?
- Refer to Figure 3 below. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed? 18- 16 Supply 14 12 10 4 Demand 30 60 90 120 150 180 210 240 270 Q Select one: a.12 b.8 c.10 O d.6 According to the Figure 3 above. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the sellers in this market? Select one: a.4 b.2 с. 8 d.6 00 OOOO1Assume that the market for a good is in equilibrium at a price of $20 and a quantity of 100 units. After the government imposes a $5 per-unit excise tax on the good, the price that buyers pay for the good increases by $3. Which of the following are possible values for the government tax revenue and deadweight loss in the market? * O Tax revenue is $200, deadweight loss $0 O Tax revenue is $300, deadweight loss $O Tax revenue is $300, deadweight loss $100 Tax revenue is $500, deadweight loss $200 O Tax revenue is $500, deadweight loss $300 Assume that hot dogs and mustard are complementary goods. If the price of hot dogs increase, what will happen to the price and quantity sold of mustard? Price will increase and quantity sold will increase. Price will increase and quantity sold will decrease. Price will decrease and quantity sold will decrease. Price will decrease and quantity sold will increase. O None of the above.
- Consider the effects of two taxes: lump-sum tax and a price distorting tax. Consider a consumer. Let the price of good X be Px, and the price of good Y be Py = 1. In the figure below. The budget line Lo of the consumer is the before-tax budget line. In the figure below, A, B, C, D, and E are some unknown numbers. E D L2 Uo U2 Lo A 1. Using A, B, C, D, and E, answer the value of the income of the consumer.You are an economist in the Internal Revenue System and just heard of a plan to increase the sales tax on a certain widget by $.06. Last year customers purchased about 10 million widgets. The demand curve in the last year was such that a $.01 increasein price decreases sales by 100,000. A study showed that a $.01 increase in price resulted in producers willing to provide 50,000 more widgets to the market. Congress stated that this$.06 tax will increase government revenues by $600,000 and raise the price of each widget by $.06. Is this correct? If so, explain why this is the case and, if not, what is the increase in prices and revenues?Answer the given question with a proper explanation and step-by-step solution.
