The graph shows the demand curve for coal. The government imposes a tax on coal and the buyer pays the entire tax. Draw the supply curve of coal. Label it S. Draw a second supply curve that shows the effect of the tax. Label it S + tax. The more .... the supply of coal, O A. elastic; the larger is the amount of the tax paid by the seller OB. elastic; the larger is the amount of the tax paid by the buyer OC. elastic; the more equally is the split of the tax between the buyer and the seller OD. inelastic; the larger is the amount of the tax paid by the buyer

The graph shows the demand curve for coal. The government imposes a tax on coal and the buyer pays the entire tax. Draw the supply curve of coal. Label it S. Draw a second supply curve that shows the effect of the tax. Label it S + tax. The more .... the supply of coal, O A. elastic; the larger is the amount of the tax paid by the seller OB. elastic; the larger is the amount of the tax paid by the buyer OC. elastic; the more equally is the split of the tax between the buyer and the seller OD. inelastic; the larger is the amount of the tax paid by the buyer

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 19 If the price elasticity of supply is 0.1, which of the following is correct when price increases by 5 percent, Qs will decrease by 0.1 percent when price increases by 5 percent, Qs will increase by 0.5 percent O when income increases by 10 percent, Qs will increase by 1 percent Owhen price decreases by 8 percent, Qs will increase by 6.4 percent « Previous No new data te
Calculate, interpret and try to explain where applicable in each question, why the elasticities of demand for the following examples occur: a. The government announced an introduction of excise tax from R1 to R1.50 per bottle of beer. This increase results in an overall price increase from R9 to R10.50 per bottle to consumers. The expected tax revenue from this will be R30,000. Before the tax hike, 28,000 beers were sold. b. What will happen to the total revenue of soft drink companies if the elasticity of demand for soft drinks is higher than 1 and the price of soft drinks decreases? c. The quantity demanded of a popular magazine decreases from 10,000 copies to 6,000 per month after the publisher increased the price of a copy from R25 to R40. Total revenue from sales of a prescribed textbook on economics increased from R50,000 to R60,000 when the price of the book increased from R400 to R600 per book. Explain why.
2. Using the following graph, answer the following questions. Also, show/Label your answers for parts a-e on the graph as well. Price 20 18 16 14 12 10 6. 4 6 8 10 12 14 16 Quantity 2 a. Suppose a $4 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed? b. Suppose a $4 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?
1. Supposed that UMA Condominiums are an ordinary good and demand for Condominiums is inelastic. What is the effect on Nagenyos Consumer Surplus if there is a decrease in price of Condominiums? Explain. 2. Based from your answer in the questions pertaining to the supply of Condominiums in response to the demand of Nagenyos, enumerate at least two (2) possible effects of the determinants of demand ( (a) price, (b) income, (c) price of related goods like apartments and residential houses, and (d) consumer taste and expectation) and determinants of supply ( (a) flexibility of inputs, (b) mobility of inputs, (c) ability to produce substitute and (d) time ).
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A $1-per-gallon tax on the sale of gasoline will raise the price by $1 per gallon if Select one: a. the supply is perfectly inelastic. O b. the demand is unit elastic. the supply is perfectly elastic. O d. the demand is perfectly elastic.