What is the effect of a $1 specific tax collected from producers on equilibrium price and quantity if demand is perfectly elastic?Price is unchangedand quantity decreasesWhat is the incidence on consumers? Explain.The incidence of the tax that falls on consumers is.percent (enter a numeric response using an integer) because consumers areV price sensitive.OCTtv2....MacBook AirDII

As demand curve is perfectly elastic so demand curve is horizontal and parallel to x-axis. Supply…

Answered: What is the effect of a $1 specific tax…

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 You are in the business of producing and selling popcorn, cheese, crackers, and wine. The government plans to impose a tax on one of these products. Based on the elasticities in the table provided, as a profit-minded business person, which good would you (the business owner) most prefer to have taxed? Price elasticity Price elasticity of supply of demand Popcorn 1.2 2.0 Cheese 2.2 1.1 Crackers 1.6 1.3 Wine 1.7 1.8 Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Cheese b. Crackers Рорсоrn Wine
If you estimate a price elasticity of demand equal to 1.25 (negative sign is implied), do consumers orproducers shoulder more of a tax on the relevant good? Explain briefly.
The price elasticity of demand is -3, the price elasticity of supply is 1. The government imposes a per-unit tax of 80 Cents on the sale of a cup of coffee in paper cups. Compute how much of the 80 Cents per cup is actually borne by the consumer and how much is borne by the seller.
All provinces impose sales taxes on gasoline, a good that is recognized to be price inelastic. According to the Alberta Treasury Board and Finance, Alberta imposes a sales tax of $0.09 per litre of gasoline. If the tax was doubled from its present level, would tax revenue double? Explain why or why not. If the tax was doubled from its present level, would tax revenue increase? Explain why or why not.
1. Jack, a music major, is perusing Jill's notes for her economics class, where she has written that "total revenues will rise with price rises only if demand is elastic." Jack tells Jill II this is nonsense because firms can always increase their revenues by raising price. How should Jill respond?
QUESTION 10 We have the following information: When P = $5, quantity demanded is 120 units. When P = $10, quantity demanded is 100 units. When P = $15, the quantity demanded is 80 units. Assuming a linear demand, when P = $10, the elasticity of demand in total revenue. and a 1 percent decrease in the price will cause is-2, an increase is-1, a decrease is-2.5, an increase Ois -0.4, a decrease
Consider the graph at right. Assume that before any tax, firms were willing to supply 5 thousand pounds of lobster at a price of $50 per pound. Use the line drawing tool to draw a new supply curve reflecting a $30 per pound tax. Label this line 'STaxı Carefully follow the instructions above, and only draw the required object. (Enter all responses as whole numbers) The new price consumers will pay is $65 and the new price producers will receive is $ C Price 100- 95- 90- 85- 80- 75- 70- 65- 60- 55- 50- 45- 40- 35- 30- 25- 20- 15- 10- 5- -O 2 STax 3 4 5 6 Quantity (thousands) -∞ 8 S D 9
Consider the graph at right. Assume that before any tax, firms were willing to supply 5 thousand pounds of lobster at a price of $50 per pound. Use the line drawing tool to draw a new supply curve reflecting a $20 per pound tax. Label this line 'S Taxi Carefully follow the instructions above, and only draw the required object. (Enter all responses as whole numbers) The new price consumers will pay is $ and ……… Price 100- 95- 90- 85- 80+ 75- 70+ 65- 60- 55- 50+ 45- +3828== 40+ 35- 30- 25- 20+ dit 154 104 5- d 0- 0 1 2 7 3 4 5 6 Quantity (thousands) STax -00 8 S D Fox 9
The government's policy goal is to reduce sugar consumption since consuming a lot of sugar is linked with negative health outcomes such as diabetes and hearth disease. In order to discourage consumers from consuming sugary soft drinks, the government is considering placing a sales tax on soda. Government economists have estimated the price elasticity of demand is -2.Which of the following statements is true? a.The tax on sugary soft drinks will likely decrease the demand for sugar-free soft drinks. b.Since consumers' demand for sugary soft drinks is elastic, the tax on sugary soft drinks will likely raise considerable revenue but likely will not reduce the consumption of sugary soft drinks by consumers. c.Since consumers' demand for sugary soft drinks is elastic, the tax will likely work to discourage sugary soft drink consumption. d.Taxes do not discourage consumers from consuming products.
The elasticity of demand for home computers is -2.5, the elasticity of demand for business computers is -.90, and the elasticity of supply for computers for both purposes is 1. a. A per-unit tax of $200 is imposed on the suppliers of computers. How much does the gross price increase in each market? [Hint: first find the tax incidence/shares.] b. Suppose the untaxed market equilibrium price and quantity in the home computer market are $850 and 10 million, respectively. In the business market, the untaxed market equilibrium price and quantity are $1200 and 15 million, respectively. What is the deadweight loss of the $200 tax? Answer part B please! Hand written asap
a)When John can sell totem poles for 1,800 each, he markets 60 annually. when the price falls to $600 each, he is willing to sell only 24 each year. What is his price elasticity of supply ? b) government pays attention to the elasticity of demand when selecting foods and services upon which to levy excise taxes. Assume a $1.00 tax is levied on some good and 10,000 units are sold. What is the tax revenue collected ?
Question 28 As part of a health program, a city imposes a tax on soda pop. We would expect consumers to pay almost all of this tax if demand is what? a inelastic and supply is inelastic b inelastic and supply is elastic c elastic and supply is elastic d elastic and supply is inelastic

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