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 pack)109810SupplyDemand0 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)packs, and the government collects4.00in tax revenue. Suppose the government imposes a $2-per-pack tax on suppliers.At this tax amount, the equilibrium quantity of cigarettes isTAX REVENUE (Dollars)Now calculate the government's tax revenue if it sets a tax of $0, $2, $4, $5, $6, $8, 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.2001801601401201008060402000+1True23456TAX (Dollars per pack)O False789packs, and the government collects104Suppose the government is currently imposing a $3-per-pack tax on cigarettes.Laffer CurveTrue or False: The government can raise its tax revenue by increasing the per-unit tax on cigarettes.in tax revenue.

The Laffer curve illustrates the tax revenue at each possible level of tax rate.

Answered: Suppose the government imposes a…

Suppose the government imposes a $2-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is packs, and the government collects $ in tax revenue.

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

The poor tend to have a price elasticity of demand for movie tickets that is greater than 1. Why don't you see signs offering “poor people discounts” similar to the signs offering ‘senior citizen discounts”?
The quantity demanded of salt decreases when the price of pepper increases. This is an example of * own-price elasticity. supply elasticity. income elasticity. O rubber band elasticity. cross-price elasticity. If the government wants to put a per unit tax on a product so that it can raise revenue to support local schools, it would most likely accomplish this goal by doing which of the following? * O placing a tax on a good with an elastic demand. placing a tax on a good that has many substitutes. placing a tax on a good with an inelastic demand. placing a tax on a good with a perfectly elastic demand. O relying of the goodness of mankind and simply ask for donations.
Which of the following statements is true? a) If the PED for a product is less than zero, the demand for the product is said to be inelasticb) If the PED for a product is greater than zero, the demand for the product is said to be elasticc) The flatter the demand curve the more inelastic the demand for the productd) If the product is a necessity, then the demand tends to be more inelastic The Consumer Surplus is a) the difference between what a consumer wishes to buy and what he can afford to buyb) the difference between what the consumer plans to buy and what he actually buysc) the difference between what the consumers is willing to pay for a product and what he paysd) the difference between what the consumer is able to pay and what he actually pays
How does a sugar tax that increases the final price of non-alcoholic beverages with sugar address the problem? Using the concept of price elasticity of demand, is a tax on non-alcoholic beverages with sugar the best way of addressing the problem?
The price elasticity of demand for beer among young adults (age 18 to 24) is about 1.30, and the number of highway deaths is roughly proportional to the group’s beer consumption. If a state imposes a beer tax that increases the price of beer by 20%, by how much will the number of highway deaths among young adults decrease?
In order to reduce farm output, raise farm prices, and thus raise farm incomes (revenues), the government pays farmers to set aside a portion of their land from production. Using a graph, explain in terms of the elasticity of demand for farm products why farmers may be better-off when harvests are low even if we ignore the money they receive from the set-aside program.
Under which circumstances does the tax burden fall entirely on consumers?
Please answer the following, a diagram and one paragraph should help support your answer. With consideration for elasticity (especially PED), what would be one industry in which the government instituting a subsidy would make sense and why? EXAMPLE: It would make sense for the government to subsidize the fashion industry because it is generally elastic in terms of PED, and it would benefit both producers and consumers due to etc.
How does elasticity affect the burden of a tax? (max: 4 sentences)
The demand for boxes of nails is estimated to be Q 185-10 p + 3 Y, Q2 where income is measured in thousands of dollars. If p = 5, and Y = 30, a. What is the income elasticity? Interpret and explain your result. What type of good is this? b. If the equation is then re-estimated using just dollars instead of thousands of dollars, what will be the effect on the coefficient for Y and the income elasticity? Explain your result. c. How would the income elasticity change if the price were increased to $9.50? Interpret and explain your result.
Suppose the price elasticity of demand for cigarettes is -0.7 and that the government can essentially set the price of cigarettes by altering the tax rate. If the government wishes to reduce the quantity of cigarettes demanded by 20 percent, how much must it raise the price of cigarettes? The government, to achieve its goal, must raise the price of cigarettes by percent. (Enter your response rounded to two decimal places)
The current price for a good is $20, and 90 units are demanded at that price. The price elasticity of demand for the good is - 2. When the price of the good drops by 5 percent to $19, consumer surplus increases by $. (Enter your response to the nearest penny.)