The vertical distance between points A and B represents the original tax. ↑Price 12 11 10 + 9 6 3 2 05 1 15 2 25 3 35 4 45 5 Quantity If the government changed the per-unit tax from $5.00 to $2.50, then the price paid by buyers would be $7.50, the price received by sellers would be $5, and the quantity sold in the market would be 1.5 units. Compared to the original tax rate, what is the effect of this policy change to the government revenue and deadweight loss. Calculate.

The vertical distance between points A and B represents the original tax. ↑Price 12 11 10 + 9 6 3 2 05 1 15 2 25 3 35 4 45 5 Quantity If the government changed the per-unit tax from $5.00 to $2.50, then the price paid by buyers would be $7.50, the price received by sellers would be $5, and the quantity sold in the market would be 1.5 units. Compared to the original tax rate, what is the effect of this policy change to the government revenue and deadweight loss. Calculate.

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 44 Please refer to the description of a tax on a market, represented by the graphic .. The amount of deadweight loss as a result of the tax is represented by the area(s) Check all that apply. F C. E.
What is the buyers’ share of the burden of the tax _______?
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(Figure: Determining Tax Burdens) Based on the graph, the original market price is $4. The graph depicts a tax of with a corresponding deadweight loss of Price ($) 98765432 T X D 0 50 100 150 200 250 300 350 400 450 500 550 600 Quantity $6; $3 $3; $150 $6; 50 units $3; $75
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What is the tax burden on the buyer and seller?