Use the letters in the graph below to answer this question letter or letters representing each area in the graph) As a result of the imposition of the excise tax in the market, a deadweight loss of emerges, consumer surplus decline to area and the government gains revenue equal to The following graph depicts the impact in a market after the government imposes an excise tax. P $16 $10 P²₁ $9 P² $7 P²₂ $6 $3 a d QE1 QE 1,000 1,400 Staher tax So before tax Q D 4,000

Use the letters in the graph below to answer this question letter or letters representing each area in the graph) As a result of the imposition of the excise tax in the market, a deadweight loss of emerges, consumer surplus decline to area and the government gains revenue equal to The following graph depicts the impact in a market after the government imposes an excise tax. P $16 $10 P²₁ $9 P² $7 P²₂ $6 $3 a d QE1 QE 1,000 1,400 Staher tax So before tax Q D 4,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use the graph of a market below to answer the following question. The equilibrium price in the market before the tax is imposed is 7 65 6 55 Trice 5 45 4 3.5 3 25 2 15 1 05 5 10 15 20 25 30 35 40 45 $3.50 $5.00 $2.00 $1.50 D Sater 35 60 65 70 quantity
Suppose government imposes a tax on buyers of $30 per hotel room. After the tax is in effect: What is the Quantity exchanged in the market after tax? What is the buyers & sellers' price? Also, what is the incidence of tax? Show the deadweight loss on your 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 pack) 10 9 8 1 0 Supply Demand 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Packs) Suppose the government imposes a $2-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is Graph Input Tool Market for Cigarettes Quantity (Packs) Demand Price (Dollars per pack) Tax (Dollars per pack) 40 6.00 2.00 Supply Price (Dollars per pack) packs, and the government collects 4.00 in tax revenue.
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
Suppose that the government imposes a per-unit tax on cell phones. The tax is imposed on producers of cell phones and the amount of the tax is $50 per cell phone. The following graph shows the effect of the tax. Use the graph to answer the following questions. a) How much of the tax per cell phone is paid by producers? How much of the tax per cell phone is paid by consumers? b) How much tax revenue (in total) does the government collect from the tax imposed on cell phones? c) What is the amount of the deadweight loss due to the presence of the tax on cell phones?
Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and S, is the supply curve after the tax. Price 18 12 10 10 12 Qua (a) For the market for cigarettes without the tax. Indicate: (1) Price paid by consumers (i) Price paid by producers (ii) Quantity of cigarettes sold (iv) Buyer's reservation price (v) Seller's reservation price
Question 11 Explain how do the tax incidence and deadweight loss of a commodity tax vary with the elasticities of demand and supply (you do NOT have to refer to the specific demand and supply in the exercise above. You have to discuss, in general, how the elasticities of demand and supply affects the tax incidence and deadweight loss. A BI EEP E
9. 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 $40.60 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. 200 PRICE (Dollars per bottle) 160 Supply 140 120 100 14 80 Demand 60 40 20 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Bottles of wine) 180 0 Before Tax After Tax Graph Input Tool…
The following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. How much will bus service providers get per ticket after the tax is imposed? $5.50 $4 $4.50 $5
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4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph. 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 bottle) 100 90 80 20 10 0 0 Supply Demand 14 28 42 56 70 84 98 112 126 140 QUANTITY (Bottles) Graph Input Tool At this tax amount, the equilibrium quantity of gin is Market for Gin Suppose the government imposes a $20-per-bottle tax on suppliers. Quantity (Bottles) Demand Price (Dollars per bottle) Tax (Dollars per bottle) 56 60.00 20.00 Supply Price (Dollars per bottle) bottles, and the government collects $ ? 40.00 in tax revenue.