Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 6, Problem 3CQQ
To determine
The impact of tax on consumers and sellers.
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Students have asked these similar questions
The market for kaleburgers is given below.
Price
$10
Supply
$9
$8
$7
$6
$5
$4
$3
$2
$1
Demand
200
400
600
800
1000
burgers/day
Suppose the government imposes a $2 per burger tax on this market.
a.) In response to the tax, the consumer price will rise to
per burger.
b.) In response to the tax, the price paid to producers will fall to
per burger.
c.) As a result of this tax, the quantity transacted will be
burgers per day.
2. Using the following graph, answer the following questions. Also, show/Label your answers
for parts a-e on the graph as well.
Price
20
18
16
14
12
10
6.
4 6 8 10 12 14 16 Quantity
2
a. Suppose a $4 per-unit tax is imposed on the sellers of this good. What price will buyers pay
for the good after the tax is imposed?
b. Suppose a $4 per-unit tax is imposed on the sellers of this good. How much is the burden of
this tax on the buyers in this market?
Please help
e
Chapter 6 Solutions
Essentials of Economics (MindTap Course List)
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- 1. Discuss the impact of the imposition of a tax (on the seller). What happens to the following? a. How does elasticity impact the incidence of a tax 2. Discuss two unintended effects of a price ceiling?arrow_forwardEconomicarrow_forwardThe demand and supply schedule for coffee are: a. If there is no tax on coffee, what is the price and how much coffee is consumed? b. What is the consumer surplus? Show your calculations. c. What is the price elasticity of demand when the price goes up from $4 to $5 dollars? Is the demand for coffee elastic or inelastic? Explain.arrow_forward
- Tax sellersarrow_forwardIn the market for Widgets, the equilibrium price is $ 20 and the equilibrium quantity is 5000 Widgets, which of the following statements is FALSE? A. None of the above B. If the government sets a price ceiling at $ 15 companies will increase the quantity supplied C. If the government sets the price floor for widgets at $ 25 there will be a surplus of widgets in the market D. If the price ceiling is set at $ 15 there will be a shortage of Widgets in the marketarrow_forwardPlease provide answer in 1 hr please urgentarrow_forward
- 7 The equilibrium price of a good is $15. Suppose the government introduces a tax on this good. In this case, the price paid by consumers is 1.4 times more than the equilibrium price, and the price received by producers is 1.2 times less than the equilibrium price. Calculate the amount of tax per good. Enter your answer in the box below and round to two decimal places if necessary.arrow_forward37. Which of the following factor is affecting supply negatively? a. Tax b. Technology c. Subsidy d. Favorable climatearrow_forwardRefer to the graph below. A $6.95 B) $3.25 C) $4.45 D) $4.85 E $5.45 F) $4.95 PRICE Select the possible prices that buyers would pay if a $2 tax were added to this market. G) $6.85 5 3 Demand 60 100 QUANTITY Supplyarrow_forward
- A). Draw the supply and demand curves for the market of specific good. B). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price ceiling of $3 what happens? Draw the new graph explaining how quantities are affected by that decision. C). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price floor of $5 what happens? Draw the new graph explaining how quantities are affected by that decision.arrow_forward. Which statement best explains how a price ceiling affects the market for gasoline? It can cause more gasoline producers to enter the market. It can lead to producers increasing their production costs for gasoline. It can cause shortages in the supply of gasoline. It can lead to a decrease in the demand from consumers for gasoline.arrow_forwarddo fast.arrow_forward
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