Suppose the government institutes a tax of $5.80 per pair, to be paid by the seller. (Hint: To see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) 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 pair) 50 8. G४ 45 40 2 8 2 25 35 30 20 15 0 H 0 4 Demand 1 1 Supply 10 20 30 40 50 60 70 80 90 100 QUANTITY (Pairs of shoes) Graph Input Tool Market for Shoes Quantity (Pairs of shoes) Demand Price (Dollars per pair) 10 75.00 Supply Price (Dollars per pair) Supply Shifter Tax on Sellers (Dollars per pair) 17.00 0.00 Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.

Suppose the government institutes a tax of $5.80 per pair, to be paid by the seller. (Hint: To see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) 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 pair) 50 8. G४ 45 40 2 8 2 25 35 30 20 15 0 H 0 4 Demand 1 1 Supply 10 20 30 40 50 60 70 80 90 100 QUANTITY (Pairs of shoes) Graph Input Tool Market for Shoes Quantity (Pairs of shoes) Demand Price (Dollars per pair) 10 75.00 Supply Price (Dollars per pair) Supply Shifter Tax on Sellers (Dollars per pair) 17.00 0.00 Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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