Please provide your answers to this question directly below in the space provided. Please number your answers according to the corresponding letter of each question. Use the following graph to answer the questions that follow: $15 13 12 11 10 9. a. The graph illustrates a tax on b. Carefully identify the area of new consumer surplus. c. Carefully identify the area of new producer surplus.

Please provide your answers to this question directly below in the space provided. Please number your answers according to the corresponding letter of each question. Use the following graph to answer the questions that follow: $15 13 12 11 10 9. a. The graph illustrates a tax on b. Carefully identify the area of new consumer surplus. c. Carefully identify the area of new producer surplus.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 8PA

See similar textbooks

Similar questions

The govemment is considering imposing taxes onthe sellers of certain classes of products. The first tax they are considering is a tax on 2% milk. The second is a tax on all dairy products. The third is a tax on all food products. Which of these three taxes would you expect to have the largest impact on the sticker prices of the taxed products? Explain.
Certain items, such as gasoline, air travel, hunting equipment, cigarettes, andtelecommunications services, have a special tax added to the purchase price. What is the name ofthis tax?
What is the equilibrium P* and Q* before the imposition of the tax?
How does tax affect AE line? Draw graphs to explain
The graphs below illustrate the market for a product on which an excise tax has been imposed by government. $14+ Price 11 W S+T A 8 V SAU 2 0 2 4 S 678 10 12 14 16 Quantity Refer to the above graph. The excise tax per unit shouldered by the buyers is $ Please input the numerical answer without the $ sign.
1. Consider the market for candy bars given below. Suppose that the government imposes a tax of $2 per candy bar in this market. Show on the graph and calculate the following: Price 5 $4.50 $4 $3.50 Supply 53 $2.50 $2 $1.50 $1 Demand S0.50 400 800 1200 1600 2000 2400 2800 3200 3600 4000 Candy Bars A. The quantity the market will produce with the tax. B. The government revenue from the tax. C. The deadweight loss from the tax. D. The consumer surplus with the tax. E. The producer surplus with the tax.
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.6 and 0.8 respectively. a. Suppose the government imposes a per-unit tax on the cigarette sellers. Who, buyers or sellers, would share a heavier tax burden? Explain your answers without calculation. b. Suppose the government imposes a per-unit tax of $40 on the cigarette sellers. By how much would buyers and sellers of cigarettes share the tax burden respectively? Show your calculation. c. Suppose many small sellers, such as newsstands, complain the heavy tax burden borne by them. Would it be better to these small sellers if the government decides to impose a $20 per-unit tax on both the buyers and the sellers of cigarette? Explain.
The graph shows the demand and supply of bungee jumps in Xtremeland. The government decides to impose an 200 Supply 180 excise tax on bungee jumps to help pay for the high 160 number of back and neck injuries. 140 120- 100- 80 60- 40 Demand 20- 50,000 0 10,000 30,000 70,000 Quantity of bungee jumps What would the government's tax revenue be if it imposes a tax of $80 on each jump? What would the government's tax revenue be if it imposes a tax of $40 on each jump? What would the government's tax revenue be if it imposes a tax of $120 on each jump? Price of bungee jumps (S)
Macmillan Learning The graph shows the demand and supply of bungee jumps in Xtremeland. The government decides to impose an excise tax on bungee jumps to help pay for the high number of back and neck injuries. What would the government's tax revenue be if it imposes a tax of $80 on each jump? What would the government's tax revenue be if it imposes a tax of $40 on each jump? S What would the government's tax revenue be if it imposes a tax of $120 on each jump? $ S Price of bungee jumps ($) 200 Supply 180 160. 140 120- 100. 80 60. 40 20 0 10,000 30,000 50,000 Quantity of bungee jumps Demand 70,000
Question 6
Each state imposes its own excise tax on gasoline. Suppose, for example, that the state of Massachusetts imposes a state gasoline tax of $0.26 per gallon. Suppose further that an average of 1,022,000 gallons of gasoline per day were sold in Massachusetts in 2010. a. Massachusetts' total revenue from the gasoline tax in 2010 was approximately $111 million $86 million $97 million $232 million