Price (dollars per bucket)161514So131210200300400500600700800Quantity (buckets)The above figure shows the market for buckets of golf balls at the driving range. Anew leisure time tax is placed on suppliers in this market, shifting the supply curvefrom So to S1. The amount of this tax isper bucket of golf balls.O A) $3B) $1C) $2O D) $4%3D

Answered: Price (dollars per bucket) 16 15 14 13…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price (dollars per bucket)
16
15
14
So
13
12
10
200
300
400
500
600
700
800
Quantity (buckets)
The above figure shows the market for buckets of golf balls at the driving range. A
new leisure time tax is placed on suppliers in this market, shifting the supply curve
from So to S1. The amount of this tax is
per bucket of golf balls.
O A) $3
B) $1
C) $2
O D) $4
%3D

Expert Solution

Step 1

In the above diagram, we can see that a new leisure time tax on suppliers leads to a fall in the supply that shifts the supply curve from So to S1. Now, as we can see that there are 3 units of fall in the supply i.e point 1 2, & 3 that implies there has been a tax of $3 placed by the government that decreases supply by 3 units.

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