Suppose the government decides to tax subway tickets, instead. The following graph plots the yearly supply and demand curves for this good, as wellas another supply curve shifted upward by the proposed tax amount ($60 per ticket).On the following graph, perform the same exercise that you did on the graph for ski passes. Use the green rectangle (triangle symbols) to shade thearea that represents tax revenue for subway tickets. Then, use the black triangle (plus symbols) to shade the area that represents the deadweightloss associated with the tax.PRICE (Dollars per ticket)2 2 8 8 8 2 2 8 2 2 2 2 -0Subway Tickets MarketS+TaxSupplyD₁50 100 150 200 250 300 350 400 450 500 550 600QUANTITY (Tickets)Tax RevenueDeadweight Loss(?)Complete the following table by entering the tax revenue collected and deadweight loss caused by each of the two tax proposals.Tax Revenue Deadweight Loss(Dollars)(Dollars)If the Government Taxes...Ski passes at $60 per passSubway tickets at $60 per ticketIf the goal of the government is to impose the tax that is more efficient, it should taxburdens of the two tax laws are equal.). (Hint: Assume the administrative. Is thinking about levying a per-unit tax of $60 on firms supplying either ski passes or subway tickets. The supply curves forboth of the two goods are identical, as given by the following graphs. The demand for ski passes is given by De (on the first graph), and the demandfor subway tickets is given by Dr (on the second graph).Suppose the government decides to tax ski passes. The following graph plots the yearly demand and supply for this good. It also plots another supplycurve (S+ Tax) shifted upward by the proposed tax amount ($60 per pass).On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for ski passes. Then use the blacktriangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax.PRICE (Dollars per pass)2 8 2 2 2 2 2 2 2 2 201201101009060403020104Ski Passes MarketS+TaxSupplyDe0 50 100 150 200 250 300 350 400 450 500 550 600Tax RevenueDeadweight Loss

Equilibrium in the market occurs at the intersection of the demand and supply curves. At the…

Suppose the government decides to tax subway tickets, instead. The following graph plots the yearly supply and demand curves for this good, as well as another supply curve shifted upward by the proposed tax amount ($60 per ticket).

Suppose the government decides to tax subway tickets, instead. The following graph plots the yearly supply and demand curves for this good, as well as another supply curve shifted upward by the proposed tax amount ($60 per ticket).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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