Suppose that a market is described by the following supply and demand equations: Q³ = 2P QD=300-P A tax of T is place on buyers, so the new demand equation is QD=300-(P+T). The deadweight loss of a tax is the area of the triangle between the supply and demand curves. Recalling that the area of a triangle is 1/2"base height, which of the following functions of T is the deadweight loss? ⒸT²/3 2T/3 2*(300-T)/3 (300-T)/3

Suppose that a market is described by the following supply and demand equations: Q³ = 2P QD=300-P A tax of T is place on buyers, so the new demand equation is QD=300-(P+T). The deadweight loss of a tax is the area of the triangle between the supply and demand curves. Recalling that the area of a triangle is 1/2"base height, which of the following functions of T is the deadweight loss? ⒸT²/3 2T/3 2*(300-T)/3 (300-T)/3

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

In a market, the demand function is given by the equation Q = 150 - P and the supply function is given by Q = -30 + 3P. The government now imposes a tax on suppliers of t per unit sold. The consumer tax burden is: the consumer tax burden is 1/4 of the tax t the consumer tax burden is 1/3 of the tax t the consumer tax burden is 1/2 of the tax t the consumer tax burden is zero O the consumer tax burden is 3/4 of the tax t
The inverse supply function for pizza is: pS = 4 + QS The inverse demand function for pizza is: pD = 10 - QD The deadweight loss of a $2 tax on production is: %D %3D
Suppose that a market is described by the following supply and demand equations: Qs = 2P, Qd = 300 - P Suppose that a tax of T is placed on buyers, so the new demand equation is Qd = 300 – (P + T) d) Solve for deadweight loss as a function of T.
2
Algebraically, solve for the after tax equilibrium price and quantity in the corn market, if the government collects a specific tax of t=$2.40 from customers. The before-tax linear demand function for U.S. corn is given as Q=15.6-0.5p and the original supply curve is given as Q=9.6+0.25p. Please show with a diagram.
Question 4 Consider the following supply and demand functions in a market: p=12-2Q p=2Q Suppose the government imposes a tax rate t*=4 on demand. Compute the total legal tax burden (incidence) on producers (after tax t* is imposed). (Enter your answer to one integer. For "8", you would write 8).
Suppose you are an aid to the Odododiodo Member of Parliament who is concerned about the impact of a new tax on the welfare on his constituents. You have explained to him that one of the ways he can determine the impact is to calculate the price elasticity as well as the consumer surplus. Conduct a formal analysis by undertaking the following exercises when the demand and supply functions for the goods in question are given as Qd=500-5p and Qs=2p-60 a. Sketch the supply and the demand curves.b. Calculate the equilibrium price and quantity.c. If government imposes a tax of ¢2 on this commodity, calculate the new price and quantity afterthe imposition of the taxd. Calculate the consumer surplus before the taxe. Calculate the own price elasticity of demand before the imposition of the tax.
Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for champagne, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per case) 50 45 40 35 30 25 20 15 10 5 0 0 Supply Demand 8 16 24 32 40 48 56 64 72 80 QUANTITY (Cases) Graph Input Tool Suppose the government imposes a $10-per-case tax on suppliers. At this tax amount, the equilibrium quantity of champagne is Market for Champagne Quantity (Cases) Demand Price (Dollars per case) Tax (Dollars per case) 32 30.00 10.00 Supply Price (Dollars per case) cases, and the government collects $ 20.00 in tax revenue.
Suppose that the market for cigarettes in a particular village has the following supply and demand curves: QS = P QD = 80 – P %3D Suppose that the village council needs to raise $800 in revenue and decides to do this by taxing the cigarette market using an excise tax t. What should the excise tax t be in order to raise the required amount of money?
Suppose supply is P= 4 + (1/4)Qs and demand is P= 58 ―(1/2)Qd. Suppose a tax of $3 per unit is placed on the good. What is the size of the deadweight loss? What fraction of the tax is paid by producers?
Suppose the government imposes an excise tax on mountain bikes. The black line on the following graph shows the tax wedge created by a tax of $40 per bike. First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax, Finally, use the black point (plus symbol) to shade the area representing deadweight loss. After Tax 200 100 160 Tax Revenue Demand 140 120 Consumer Surplus 100 Tax Wedge Supply Producer Surplus 40 Deadweight Loss 20 60 100 150 200 210 300 0 400 40 s00 QUANTITY (Ues) ( ad a soe
analysis of the video poker market in Rye shows demand by the patrons is Qd=200-2P and the supply is Qs=2P now suppose that the city of Rye passes a law that requires all video poker arcades to contribute m cents to a city charitable fund for each game played on there machines, this is essentially a excise tax. In a diagram show the effect of the new law on the market ( Do not try to give a algebraic solution, just show what happens graphically and describe. Please illustrate how the tax of m shifts the specific curves. In the approach of modeling taxes and subsidies. The direction of the shift carries a specific meaning in economics. graphically indicate the incidence of taxation on consumers as well as arcade owners. Explain what incidence of taxation is and what the graph tells you the jncidence of this case.