Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 5, Problem 13QE
(a)
To determine
(b)
To determine
Equilibrium price and quantity with a unit tax.
(c)
To determine
Equilibrium price and quantity with a unit tax on consumers.
(d)
To determine
Impact of the tax levied on different groups.
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Students have asked these similar questions
The demand and supply equations for a product are: Q* =
0.2
300 – 6P and Q' = -40 + 6P.
Determine the market equilibrium and draw graphs.
Suppose that the government decides to impose a flat tax of
10% on each unit sold. Show that the price that consumers pay
would be the same if the government imposed a tax of Rs.
1.70 per unit sold. Draw graphs and explain.
Also calculate the total revenue earned by sellers before and
after the tax, the tax revenue raised by the government,
changes in consumer and producers surplus and dead weight
loss.
Draw the supply and demand curves associated with the table below.
Price Qs Qd
$0.00 50 200
0.50 100 175
1.00 150 150
1.50 200 125
2.00 250 100
(a) What is equilibrium price and quantity?
(b) What is equilibrium price and quantity with a $0.75 per-unit tax levied on suppliers? Demonstrate your answer graphically.
(c) How does your answer to b change if the tax were levied on consumers, not suppliers? Demonstrate your answer graphically.
(d) What conclusion can you draw about the difference between levying a tax on suppliers and consumers?
Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy. Further,
suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.25 per fountain drink. Which of the
following statements is correct?
a. The price paid by buyers is $0.25 per drink more than it was before the tax.
b. This tax causes the supply curve for fountain drinks to shift downward by $0.50 at each quantity.
c. This tax causes the demand curve for fountain drinks to shift downward by $0.50 at each quantity.
d. Forty percent of the burden of the tax falls on buyers.
Chapter 5 Solutions
Microeconomics
Ch. 5.1 - Prob. 1QCh. 5.1 - Prob. 2QCh. 5.1 - Prob. 3QCh. 5.1 - Prob. 4QCh. 5.1 - Prob. 5QCh. 5.1 - Prob. 6QCh. 5.1 - Prob. 7QCh. 5.1 - Prob. 8QCh. 5.1 - Prob. 9QCh. 5.1 - Prob. 10Q
Ch. 5.A - Prob. 1QECh. 5.A - Prob. 2QECh. 5.A - Prob. 3QECh. 5.A - Prob. 4QECh. 5.A - Prob. 5QECh. 5.A - Prob. 6QECh. 5.A - Prob. 7QECh. 5.A - Prob. 8QECh. 5.A - Prob. 9QECh. 5 - Prob. 1QECh. 5 - Prob. 2QECh. 5 - Prob. 3QECh. 5 - Prob. 4QECh. 5 - Prob. 5QECh. 5 - Prob. 6QECh. 5 - Prob. 7QECh. 5 - Prob. 8QECh. 5 - Prob. 9QECh. 5 - Prob. 10QECh. 5 - Prob. 11QECh. 5 - Prob. 12QECh. 5 - Prob. 13QECh. 5 - Prob. 14QECh. 5 - Prob. 15QECh. 5 - Prob. 16QECh. 5 - Prob. 17QECh. 5 - Prob. 1QAPCh. 5 - Prob. 2QAPCh. 5 - Prob. 3QAPCh. 5 - Prob. 4QAPCh. 5 - Prob. 5QAPCh. 5 - Prob. 1IPCh. 5 - Prob. 2IPCh. 5 - Prob. 3IPCh. 5 - Prob. 4IPCh. 5 - Prob. 5IPCh. 5 - Prob. 6IPCh. 5 - Prob. 7IPCh. 5 - Prob. 8IPCh. 5 - Prob. 9IPCh. 5 - Prob. 10IPCh. 5 - Prob. 11IPCh. 5 - Prob. 12IPCh. 5 - Prob. 13IPCh. 5 - Prob. 14IP
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