The following graph shows the daily market for jeans when the tax on sellers is set at $0 per pair. Suppose the government institutes a tax of $40.60 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) 200 180 160 140 120 100 80 60 40 20 0 1 Before Tax After Tax Supply Buyers Sellers Demand 0 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Pairs of jeans) Graph Input Tool Market for Jeans Quantity (Pairs of jeans) Demand Price (Dollars per pair) Tax Incidence (Dollars per pair) Elasticity 100 Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity (Pairs of jeans) Price Buyers Pay (Dollars per pair) Price Sellers Receive (Dollars per pair) 132.00 The tax incidence lies more heavily on the ▼ elastic side of the market. Supply Price (Dollars per pair) Supply Shifter Tax on Sellers (Dollars per pair) (?) Using the data you entered in the previous table, calculate the tax incidence borne by buyers and sellers, respectively, and calculate the price elasticity of demand and supply between the initial equilibrium quantity and the after-tax equilibrium quantity using the midpoints formula. Enter your results in the following table. 0.00 0.00
The following graph shows the daily market for jeans when the tax on sellers is set at $0 per pair. Suppose the government institutes a tax of $40.60 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) 200 180 160 140 120 100 80 60 40 20 0 1 Before Tax After Tax Supply Buyers Sellers Demand 0 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Pairs of jeans) Graph Input Tool Market for Jeans Quantity (Pairs of jeans) Demand Price (Dollars per pair) Tax Incidence (Dollars per pair) Elasticity 100 Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity (Pairs of jeans) Price Buyers Pay (Dollars per pair) Price Sellers Receive (Dollars per pair) 132.00 The tax incidence lies more heavily on the ▼ elastic side of the market. Supply Price (Dollars per pair) Supply Shifter Tax on Sellers (Dollars per pair) (?) Using the data you entered in the previous table, calculate the tax incidence borne by buyers and sellers, respectively, and calculate the price elasticity of demand and supply between the initial equilibrium quantity and the after-tax equilibrium quantity using the midpoints formula. Enter your results in the following table. 0.00 0.00
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:The following graph shows the daily market for jeans when the tax on sellers is set at $0 per pair.
Suppose the government institutes a tax of $40.60 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)
200
180
160
140
120
100
80
60
40
20
0
1
Before Tax
After Tax
Supply
Buyers
Sellers
Demand
0 100 200 300 400 500 600 700 800 900 1000
QUANTITY (Pairs of jeans)
Graph Input Tool
Market for Jeans
Quantity
(Pairs of jeans)
Demand Price
(Dollars per pair)
Tax Incidence
(Dollars per pair) Elasticity
100
Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.
Quantity
(Pairs of jeans)
Price Buyers Pay
(Dollars per pair)
Price Sellers Receive
(Dollars per pair)
132.00
The tax incidence lies more heavily on the ▼ elastic side of the market.
Supply Price
(Dollars per pair)
Supply Shifter
Tax on Sellers
(Dollars per pair)
(?)
Using the data you entered in the previous table, calculate the tax incidence borne by buyers and sellers, respectively, and calculate the price
elasticity of demand and supply between the initial equilibrium quantity and the after-tax equilibrium quantity using the midpoints formula. Enter your
results in the following table.
0.00
0.00
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