Instead, suppose the govemment taxes bus passes. The following graph shows the annual supply and demand for this good, as well as the supplycurve shifted up by the amount of the proposed tax (60 per pass).On the folowing graph, do for bus passes the same thing you did previously on the graph for concert tickets. Use the green rectangie (trangiesymbols) to shade the area that represents tax revenue for bus passes. Then, use the black triangle (plus symbols) to shade the area that representsthe deadweight ioss associated with the tax.Bus Passes Market120110SupplyS+Tax100Tax Revenue90Deadweight Loss706050203020Da1050 100 150 200 250 300 350 400 450 500 550 600QUANTITY (Passes)Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposais.Tax RevenueDeadweight LosIf the Government Taxes...(Dollars)(Dollars)Concert tickets at $60 per ticketBus passes at $60 per passSuppose the government wants to tax the good that will generate more tax revenue at a lower welfare cost. In this case, it should tax- because, all else held constant, taxing a good with a relativelyelastic demand generates larger tax revenue andsmaller deadweight loss.PRICE (Dollars per pass) The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of thesetwo goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by De (on the first graph), and thedemand for bus passes is shown by Dg (on the second graph).Suppose the government taxes concert tickets. The following graph shows the annual supply and demand for this good. It also shows the supply curve(S + Tax) shifted up by the amount of the proposed tax ($60 per ticket).On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for concert tickets. Then use theblack triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax.Concert Tickets Market120110 +SupplyS+Tax100Tax Revenue9080Deadweight Loss7060504030201050100 150 200 250 300 350 400 450 500 550 600QUANTITY (Tickets)PRICE (Dollars per ticket)

The equilibrium price and quantity of a good sold in the market are determined by the forces of…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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According to studies undertaken by the U.S. department of agriculture, the price elasticity of demand for cigarettes is between -0.3 and -0.4. Suppose congress, influenced by studies linking cigarette smoking to cancer plans to raise the excise tax in cigarettes so the price rises by 10 percent. The expected effect the price increase will have on cigarette consumption is?
The table below illustrates the market for Internet services. Use a demand-supply graph to answer the following. Draw a graph of the market for internet services before the tax (only plot the supply and demand functions). Suppose the government imposes a $15 tax per month on the supply side of the market. Sketch the new supply function after the tax.
Consider the market for pork illustrated in the graph. Suppose initial demand (D') is Q = 290 – 20p and supply (S') is Q = 80 + 40p and that a $3.00 tax is charged to consumers, shifting the demand curve to D. Using the original and after-tax pork demand functions and the supply function, derive the initial equilibrium price and quantity and the after-tax equilibrium price and quantity. %24 (Enter all responses using real numbers rounded to two decimal places) The equilibrium price is initially $ per kg. P1 ey P2 D2 D1 Q2 Q, Q. Million kg of pork per year SEP 24 30 tv Help Me Solve This Text Paces HAT More Hein ear All MacBook Air 80 DII esc F10 F11 F3 F4 F5 F6 F7 F8 F9 F1 F2 @ # $ & * 1 3 4 5 6. 7 8. P P. S per kg >
The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 26.00 18.00 10.00 Demand Result Per-unit tax B D F 33 U 20 E 36 QUANTITY (Blinkies) Complete the following table, given the information presented on the graph. $ Price consumers pay before tax $ Equilibrium quantity before tax Supply Value In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept Producer surplus after the tax is imposed Consumer surplus after the tax is imposed Tax revenue after the tax is imposed A U B 0 0 с 0 0 D 0 0 E 0 F 0 0
In the market for candy, researchers have estimated the following demand and supply curves. Demand: P= 8 - Q/100 Supply: P= (3Q)/700 If the government imposes an excise tax of $0.50 per unit. What is tax revenue out of this tax? (Remember that the tax does not change the demand and supply curves).
Suppose that the demand for digital pianos is price inelastic and the supply of digital pianos is price elastic. By what amount will a tax of $1.00 per piano levied on buyers of pianos increase the equilibrium price paid by buyers of digital pianos? by $1.00 by less than $0.50 by more than $0.50 but less than $1.00 by more than $1.00
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. Graph Input Tool Market for Jeans 200 I Quantity (Pairs of jeans) 180 100 Supply 160 Demand Price (Dollars per pair) Supply Price (Dollars per pair) 132.00 0.00 140 120 Supply Shifter 100 Demand Tax on Sellers (Dollars per…
The following graph represents the demand and supply for an imaginary good called a pinckney. The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. Complete the following table, given the information presented on the graph. Result Value Per-unit tax Price producers receive before tax Equilibrium quantity after tax In the following table, indicate which of the previous graph’s areas corresponds to each concept. Check all that apply. Concept A B C D E F Producer surplus after the tax is imposed Tax revenue after the tax is imposed Consumer surplus after the tax is imposed
The Australian government have suggested that they might need to increase GST to help fund the COVID-19 rescue package. GST is a tax on goods and services usually paid at the point of sale.Consider the market for bread. Suppose a loaf costs $4.15 and includes a 15-cent tax per loaf. q4- Has the government revenue increased or decreased? Explain the change using the concept of elasticity.
Richard and Henry like soda drinks. Henry's demand for soda is: P=10-Q; the demand for Richard is P=5.5-0.5Q. The supply of soda cans is perfectly elastic at P=1. The government imposes a tax on soda cans equal to t=$1 per can. a) Which consumer will suffer the greater loss of consumer surplus in response of the tax? why?b) Would the government prefer all consumers to be like Henry or like Richard if the government wants to maximise tax revenue? Why? Accompany your answer with a diagram to illustrate your argument.
Doyle and Samphantharak (2008) find that when a 5% gas tax is implemented, prices consumers pay for gas increase by about 4%. What role does demand elasticity play in determining the size of this price change? That is, under what demand elasticity cases would the price change be closer to 5%, or closer to 0%? Illustrate and explain using supply-and-demand graph(s)..
Suppose demand and supply are given by:Qx d = 14 −  2Px and Qx s = 14Px-2b. Suppose a $12 excise tax is imposed on the good. Determine the new inverse demand function.

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