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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 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
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
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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.
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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