The demand curve for prepaid internet services is given by Pd = 80 – 0.2Q and the supply curve is given by Ps = 20 + 0.2Q, -------> answer by using TRUE or FALSE. If the statement is correct, write TRUE on your answer sheet. If the statement is incorrect, write FALSE. Explain why you answered TRUE or FALSE. Questions 1-4; 1. The consumer surplus (CS) is estimated at 2250. 2. An imposition of a tax of PHP10 per unit on prepaid internet services will result in a producer surplus (PS) equivalent to 1262.5. 3. An imposition of a tax of PHP 10 per unit will reduce the CS by 687.5 and PS by 687.5. Thus, the net loss to society with the imposition of a tax is 1375. 4. The tax collected by the government with the imposition of this tax is equivalent to 1500.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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GIVEN FOR 1-4;

The demand curve for prepaid internet services is given by Pd = 80 – 0.2Q and
the supply curve is given by Ps = 20 + 0.2Q, -------> answer by using TRUE or FALSE. If the statement is correct, write TRUE on your answer sheet. If the statement is incorrect, write FALSE. Explain why you answered TRUE or FALSE.

Questions 1-4;

1. The consumer surplus (CS) is estimated at 2250.

2. An imposition of a tax of PHP10 per unit on prepaid internet services will result in a
producer surplus (PS) equivalent to 1262.5.

3. An imposition of a tax of PHP 10 per unit will reduce the CS by 687.5 and PS by 687.5.
Thus, the net loss to society with the imposition of a tax is 1375.

4. The tax collected by the government with the imposition of this tax is equivalent to 1500.
This tax revenue is a net loss to society. 

 

 

 

 

 

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