The figure below shows a hypothetical market for cigarettes. Price $16.00 $15.00 $14.00 $13,00 $12.00 $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 Tools Dtax=$3.00 Dtax=$6.00 Rtax-$3.00 Riax=$6.00 Dtax=$9.00 Rtax=$9.00 1 2 3 4. 7 8 Packs of cigarettes (millions) Instructions: Round your answers to two decimal places. a. Suppose the government levies an excise tax of $3.00 per pack on cigarette buyers. Draw the after-tax demand curve and the tax revenue that will be collected by the government. Instructions: Use the tool provided 'Dtax=$3.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$3.00' to illustrate tax revenue when the tax is $3.00. Drag the points to move or resize. Consumers will pay: $ per pack. Sellers will receive: $ per pack. The government will collect $ million in tax revenue as a result of the tax. b. Suppose the is raised to $6 per pack. Draw the new after-tax demand curve. Instructions: Use the tool provided 'Dtax=$6.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$6.00' to illustrate tax revenue when the tax is $6.00. Drag the points to move or resize. The government will collect $ million of revenue as a result of the tax increase from $3.00 to $6.00. c. Suppose the tax is raised again to $9.00 per pack. Draw the new after-tax demand curve. Instructions: Use the tool provided 'Dtax=$9.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$9.00' to illustrate tax revenue when the tax is $9.00. Drag the points to move or resize. The government will collect $ million of revenue as a result of the tax increase. d. True or False: The government can always increase revenue by imposing higher and higher taxes.
The figure below shows a hypothetical market for cigarettes. Price $16.00 $15.00 $14.00 $13,00 $12.00 $11.00 $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 Tools Dtax=$3.00 Dtax=$6.00 Rtax-$3.00 Riax=$6.00 Dtax=$9.00 Rtax=$9.00 1 2 3 4. 7 8 Packs of cigarettes (millions) Instructions: Round your answers to two decimal places. a. Suppose the government levies an excise tax of $3.00 per pack on cigarette buyers. Draw the after-tax demand curve and the tax revenue that will be collected by the government. Instructions: Use the tool provided 'Dtax=$3.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$3.00' to illustrate tax revenue when the tax is $3.00. Drag the points to move or resize. Consumers will pay: $ per pack. Sellers will receive: $ per pack. The government will collect $ million in tax revenue as a result of the tax. b. Suppose the is raised to $6 per pack. Draw the new after-tax demand curve. Instructions: Use the tool provided 'Dtax=$6.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$6.00' to illustrate tax revenue when the tax is $6.00. Drag the points to move or resize. The government will collect $ million of revenue as a result of the tax increase from $3.00 to $6.00. c. Suppose the tax is raised again to $9.00 per pack. Draw the new after-tax demand curve. Instructions: Use the tool provided 'Dtax=$9.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$9.00' to illustrate tax revenue when the tax is $9.00. Drag the points to move or resize. The government will collect $ million of revenue as a result of the tax increase. d. True or False: The government can always increase revenue by imposing higher and higher taxes.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter16: Information, Risk, And Insurance
Section: Chapter Questions
Problem 20CTQ: A website offers a place for people to buy and sell emeralds, but information about emeralds can be...
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![The figure below shows a hypothetical market for cigarettes.
Price
$16.00
$15.00
$14.00
$13.00
$12.00
$11.00
$10.00
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
Tools
Dtax-$3.00
Dtax-$6.00
Rtax=$3.00
Rtax=$6.00
Dtax=$9.00
Rtax=$9.00
D
3
4.
7
8
6.
Packs of cigarettes (millions)
Instructions: Round your answers to two decimal places.
a. Suppose the government levies an excise tax of $3.00 per pack on cigarette buyers. Draw the after-tax demand curve and the tax
revenue that will be collected by the government.
Instructions: Use the tool provided 'Dtax=$3.0o' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$3.00'
to illustrate tax revenue when the tax is $3.00. Drag the points to move or resize.
Consumers will pay: $
per pack.
Sellers will receive: $
per pack.
The government will collect $
million in tax revenue as a result of the tax.
b. Suppose the tax is raised to $6 per pack. Draw the new after-tax demand curve.
Instructions: Use the tool provided 'Dtax=$6.0o' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$6.00'
to illustrate tax revenue when the tax is $6.00. Drag the points to move or resize.
The government will collect $
million of revenue as a result of the tax increase from $3.00 to $6.00.
c. Suppose the tax is raised again to $9.00 per pack. Draw the new after-tax demand curve.
Instructions: Use the tool provided 'Dtax=$9.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$9.00'
to illustrate tax revenue when the tax is $9.00. Drag the points to move or resize.
The government will collect $
million of revenue as a result of the tax increase.
d. True or False: The government can always increase revenue by imposing higher and higher taxes.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc777eb6c-5f00-442c-a5ae-30c50b2299ca%2F574660ef-3a76-4959-aba6-5bf1b35b1537%2F4rc4vyt_processed.png&w=3840&q=75)
Transcribed Image Text:The figure below shows a hypothetical market for cigarettes.
Price
$16.00
$15.00
$14.00
$13.00
$12.00
$11.00
$10.00
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
Tools
Dtax-$3.00
Dtax-$6.00
Rtax=$3.00
Rtax=$6.00
Dtax=$9.00
Rtax=$9.00
D
3
4.
7
8
6.
Packs of cigarettes (millions)
Instructions: Round your answers to two decimal places.
a. Suppose the government levies an excise tax of $3.00 per pack on cigarette buyers. Draw the after-tax demand curve and the tax
revenue that will be collected by the government.
Instructions: Use the tool provided 'Dtax=$3.0o' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$3.00'
to illustrate tax revenue when the tax is $3.00. Drag the points to move or resize.
Consumers will pay: $
per pack.
Sellers will receive: $
per pack.
The government will collect $
million in tax revenue as a result of the tax.
b. Suppose the tax is raised to $6 per pack. Draw the new after-tax demand curve.
Instructions: Use the tool provided 'Dtax=$6.0o' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$6.00'
to illustrate tax revenue when the tax is $6.00. Drag the points to move or resize.
The government will collect $
million of revenue as a result of the tax increase from $3.00 to $6.00.
c. Suppose the tax is raised again to $9.00 per pack. Draw the new after-tax demand curve.
Instructions: Use the tool provided 'Dtax=$9.00' to draw the after-tax demand curve. Then, use the tool provided 'Rtax=$9.00'
to illustrate tax revenue when the tax is $9.00. Drag the points to move or resize.
The government will collect $
million of revenue as a result of the tax increase.
d. True or False: The government can always increase revenue by imposing higher and higher taxes.
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