The graph shows the market for smartphone chargers. Draw a point to show the price of a smartphone charger and the quantity bought and sold. Label it 1. The government imposes a tax of $4 per smartphone charger on buyers. Draw the D-tax curve and label it. Draw a point to show the price paid by buyers and the quantity bought and sold with the tax. Label it 2. Draw a point to indicate the price received by sellers and the quantity bought and sold with the tax. Label it 3. The tax is OA. split between the buyers and sellers, and the sellers pay more than the buyers

The graph shows the market for smartphone chargers. Draw a point to show the price of a smartphone charger and the quantity bought and sold. Label it 1. The government imposes a tax of $4 per smartphone charger on buyers. Draw the D-tax curve and label it. Draw a point to show the price paid by buyers and the quantity bought and sold with the tax. Label it 2. Draw a point to indicate the price received by sellers and the quantity bought and sold with the tax. Label it 3. The tax is OA. split between the buyers and sellers, and the sellers pay more than the buyers

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which if the following best describes the effect a $3 increase in a sales tax has on the equilibrium price in a market where the demand curve slopes downward and the supply curve slopes upward. Assume that the government collects the tax from sellers. a. The market price increases by $3. b. The market price rises by more than $3. c. The market prices rises, but the increase is less than $3. d. The market price will not change, the quantity supplied will decrease
7. Effect of a tax on buyers and sellers The following graph shows the daily market for wine. Suppose the government institutes a tax of $40.60 per bottle. This places a wedge between the price buyers pay and the price sellers receive. 200 180 160 Demand Supply 140 120 100 Tax Wedge 60 40 20 100 200 00 400 500 B00 00 1000 00 QUANTITY (Botles of wine) PRICE (Dolars per bottle)
How does lowering the tax change the gap between the price paid by buyers and the price received by sellers? By lowering the tax, the price paid by buyers quantity the price paid by sellers and the market equilibrium A. falls; falls; decreases B. falls; rises; increases C. rises; rises: increases D. rises; falls; decreases
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Figure 1 P 100 70 60 50 20 30 40 S D Q
1. What is the equilibrium price and quantity? 2. Suppose the government imposes a tax of $1.00 on each water bottle. Complete the column showing quantity supplied after the tax. (Hint: at a price of $8.00 the quantity supplied was 36000. With the tax, this quantity supplied will be supplied only at a price of $9.00, so the Quantity supplied with a tax at 9.00 is 36000) You continue, so at $8.50, the producer only gets 7.50. so is only willing to offer 32000 units. Qd Price 000s) $9.00 20 8.50 8.00 7.50 7.00 6.50 6.00 24 28 32 36 40 44 Qs (000s) 44 40 38 32 28 24 20 Quantity supplied after tax Qs(t) (000s) 36 32 Price 28 24 3. On your graph, plot the new supply curve after the imposition of the tax (in a different colour, to differentiate the supply curve). 4. What will be the new equilibrium price and quantity? 5. How much of the tax is passed onto the consumers in the form of price increase, and how much is paid by the producers? Indicate the producer and consumer burden on your…
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The table shows the market for chocolate bars. A tax of $0.30 per chocolate bar is imposed on sellers. What is the new price that buyers pay sellers for a chocolate bar? Price (dollars per chocolate bar) Quantity demanded Quantity sup (thousands per day) 55 45 35 22225 25 30 35 22334 2.00 2.10 2.20 2.30 40 2.40 15 45 Following the tax, buyers pay sellers $ per chocolate bar.
12. Effect of a tax on buyers and sellers The following graph shows the daily market for wine when the tax on sellers is set at $0 per bottle. Suppose the government institutes a tax of $23.20 per bottle, 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. 180 160 140 120 4 100 80 60 Demand 40 20 PRICE (Dollars per bottle) 200 0 0 Supply 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bottles of wine) Graph Input Tool Market for Wine…
7. Effect of a tax on buyers and sellers The following graph shows the daily market for jeans. Suppose the government institutes a tax of $46.40 per pair. This places a wedge between the price buyers pay and the price sellers receive. (?) 200 180 160 Supply 140 120 Tax Wedge 100 80 60 40 20 Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Pairs of jeans) PRICE (Dollars per pair)
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The following graph shows the weekly market for handbags in some hypothetical economy. Suppose the government levies a tax of $23.20 per bag. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE (Dollars per bag) 100 90 00 R 70 8 50 40 R20 10 0 10 Tax Wedge Supply Demand 20 30 40 50 00 70 QUANTITY (Bags of handbags) 00 00 100 C D