Now calculate the government's tax revenue if it sets a tax of $0, $2, $4, 55, 56, 58, or $10 per pack. (Hint: To find the equilibrium quantity after thetax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using the greenpoints (triangle symbol) to plot total tax revenue at each of those tax levels.Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.TAX REVENUE (Dollars)2001801601401201004020o3TAX (Dolars per pack)10ALaffer Curve PRICE (Dollars per pack)109tonAND0SupplyDemand0 10 20 30 40 50 60 70 80 90 100QUANTITY (Packs)Suppose the government imposes a $2-per-pack tax on suppliers.At this tax amount, the equilibrium quantity of cigarettes isGraph Input ToolMarket for CigarettesQuantity(Packs)Demand Price(Dollars per pack)Tax(Dollars per pack)406.002.00Supply Price(Dollars per pack)40 packs, and the government collects4.00$80 in tax revenue.

Tax revenue is the product of tax per unit and quantity. The tax revenue lead to the deadweight…

PRICE (Dollars per pack) 10 40 AU NE 0 Supply Demand 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Packs) Suppose the government imposes a $2-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is Graph Input Tool Market for Cigarettes Quantity (Packs) Demand Price (Dollars per pack) Tax (Dollars per pack) 40 6.00 2.00 Supply Price (Dollars per pack) 40 packs, and the government collects 4.00 $80 in tax revenue.

PRICE (Dollars per pack) 10 40 AU NE 0 Supply Demand 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Packs) Suppose the government imposes a $2-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is Graph Input Tool Market for Cigarettes Quantity (Packs) Demand Price (Dollars per pack) Tax (Dollars per pack) 40 6.00 2.00 Supply Price (Dollars per pack) 40 packs, and the government collects 4.00 $80 in tax revenue.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose households supply 500 billion hours of labor per year and have a tax elasticity of supply of 0.16. If the tax rate is increased by 19.6 percent, by how many hours will the supply of labor decline? a) 28.67 billion b) 1.568 trillion c) 2.465 trillion d) 3.422 trillion e) 9.183 trillion
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Tax exludes total surplus is 42017
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