Question 2The demand for good X is given by QQx ==50-2P, and the supply of good X is given by20+ 4Px. The demand for good Y is given by Q =good Y is given by Q==65-Py and the supply of5+2Py. Both goods are currently untaxed, but the government ofLesotho needs to raise revenue to finance tarred road from Masianokeng to Roma by taxinggood X with tx and good Y with ty.a. Calculate the excess burden for each good as a result of tax imposition.[15]

To calculate the excess burden for each good as a result of tax imposition, we first need to…

Answered: Question 2 The demand for good X is…

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 that the demand curve for a product is given bye Q = 100 – 2 Px + 7 Py,“ where P = £20, where P, = £20 is the price of another product- %3D a) Calculate the demand for good X in this market at the current price level. How much revenue would the firm make? b) If the firm wishes to increase total revenue, would it need to increase or decrease the current price of good X? c) Calculate the cross-price point elasticity between goods X and Y at the current price level. Are the goods complements or substitutes?
Suppose the demand and supply for Xbox-One are: Qd = 500 - 2P, Qs = -100 + 4P . Assume that consumers demand 75 less Xbox units at each price. Also, a new tax has been imposed on foreign microchips, increasing the costs of production, and reducing supply by 35 units at each price Given this information find: a. CS0 = $ b. CS2 = $ c. PS2 = $
Can you help me with questions A, B, C,D, and E thank you!!
A1-1. Imagine that a market for a good is characterized by the following supply and demand equations: QS = –35 + 35P QD =100 – 10P where QS and QD are quantities in units and P is the price per unit. (a) Graph the supply and demand curves with quantity on the horizontal and price on the vertical axis. Be sure to calculate the P and Q intercepts for demand and the P intercept for supply. Calculate and illustrate the equilibrium price and quantity. [Hint: Show your work.] (b) Calculate both the demand and supply elasticity around the equilibrium point. [Hint: you can use either the point method or the average arc (midpoint) method.] (c) If a regulator imposes a quantity restriction by granting quotas for 60 units of output to existing producers, what is the new price and quantity traded? Does this policy create deadweight loss (DWL) in the market? Briefly explain and identify any DWL in your diagram. (d) What is the value of a unit of quota? Illustrate in your diagram.…
Consider the market for pork illustrated in the graph. Suppose initial demand (D') is Q = 290 – 20p and supply (S') is Q = 80 + 40p and that a $3.00 tax is charged to consumers, shifting the demand curve to D. Using the original and after-tax pork demand functions and the supply function, derive the initial equilibrium price and quantity and the after-tax equilibrium price and quantity. %24 (Enter all responses using real numbers rounded to two decimal places) The equilibrium price is initially $ per kg. P1 ey P2 D2 D1 Q2 Q, Q. Million kg of pork per year SEP 24 30 tv Help Me Solve This Text Paces HAT More Hein ear All MacBook Air 80 DII esc F10 F11 F3 F4 F5 F6 F7 F8 F9 F1 F2 @ # $ & * 1 3 4 5 6. 7 8. P P. S per kg >
You can drag and drop files here to add them. Consider the public policy aimed at smoking: (a) Suppose studies indicate that the price elasticity of demand for cigarettes is about 2. If the government is able to increase the price of a pack of cigarette from $2 to $3 (through may be, higher taxes), by what percentage will the consumption (demand) of cigarettes decrease? Please show all calculations. (b) Studies also find that the price elasticity of demand for cigarettes for higher income earners is more inelastic compared to that of those earning less income. Why might this be true? Please explain your answer I of U X2 x2 画 tv MacBook Pro
Price (dollars per pizza) 12 13 14 15 16 17 18 19 20 Quantity demanded (millions per week) 28 27 26 25 24 23 22 21 20 Quantity supplied (millions per week) 22222222 20 21 23 25 26 27 28 The table shows the supply and demand schedules for pizza. At a price of 13 dollars per pizza, there is a 111 of pizza and so the price will (2)
The demand and supply functions for three (03) goods are given as follows: Dx = 100-3Px+Py+3Pz Dy = 80+Px-2Py-Pz Dz = 120+3Px-Py-4Pz Sx = -10+Px Sy = -20+3Py Sz = -30+2Pz The equilibrium prices and quantities of all three goods are? The government decides to: a) Impose a 25% Tax on X? b) Impose a 5 Rs /unit Tax on Y? c) Give a 10% subsidy on good z? Analyze the impact of each of these policies separately on equilibrium prices and quantities? Analyze the impact of each of these policies separately on equilibrium prices and quantities? Provide theoretical justification (using diagrams) of all results obtained?
Suppose that the demand and supply curves for green peas are given by QD = 10 – 8P and QS = 2P, where P is the price per pound and Q is measured in thousands of pounds. If the price per pound of peas is $0.50, the market _____, so the price will _____. has excess demand of 3,000 pounds; rise has excess supply of 1,000 pounds; fall is in equilibrium; remain unchanged has excess demand of 5,000 pounds; rise
The short-run demand and supply elasticities for crude oil are -0.076 and 0.088, respectively. The current price per barrel is $30 and the short-run equilibrium quantity is 23.84 million barrels per year. What will be the effects on the market price and quantity if the government decides to purchase (and store away) an additional 2 million barrels of oil? Assume that the additional consumption of oil by the government results in a parallel shift of the supply curve to the left by 2 million barrels per day What could be the economic rationale for buying and storing oil?
Suppose that the demand curve for a product is given by = 100 – 2 Px+a Py, = £20 is the price of another product, and where a Py %3D where Px = £20, where = 8. a) Calculate the demand for good X in this market at the current price level. How much revenue would the firm make? b) If the firm wishes to increase total revenue, would it need to increase or decrease the current price of good X? c) Calculate the cross-price point elasticity between goods X and Y at the current price level. Are the goods complements or substitutes? Note: The writing is clear and abbreviations are not allowed.
Corn is a very valuable product for which the U.S. government routinely offers subsidies. With no price support, the equilibrium price for corn is $300 per ton and the equilibrium quantity is 500 million tons per year. Suppose that the government agrees to pay farmers $350 for every ton of corn they produce and can't sell in the market. According to the farmer's market supply curve, 600 million tons per year is supplied at the price of $350 a ton, so production should increase to this amount. However, domestic users of corn cut back their purchases. Only 450 million tons a year is demanded at the price of $350 a ton, and purchases decrease to this amount. Farmers continue to produce 500 million tons of corn per year, so because they produce a greater quantity of corn than domestic buyers are willing to purchase, something must be done with the surplus. To make the price support work, the government decides to buy the surplus. a. In this example, how many million tons does the…

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