Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 7, Problem 6QE
(a)
To determine
Illustrate the
(b)
To determine
Determine the
(c)
To determine
Determine the
(c)
To determine
Determine the tax revenue after the tax implemented.
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Students have asked these similar questions
Use the graph to answer the following question:
Which of the following statements is most true?
A) Producers will pay the entire tax.
B) Consumers will pay 1/3 of the tax.
C) Producers will pay 1/3 of the tax.
D) Consumers will pay the entire tax.
the tax of $6 per unit ,the price that consumers will pay is $10 and quantity sold is Q=20
Question 35
Refer to the Figure 2-1. What is producer surplus after the tax?
You can answer this in one (or more) of the following ways:
Paste a picture or drawing of where to visually find the producer surplus on the graph.
Describe in words where on a graph you would find producer surplus (ex: in relation to supply curve, demand curve, above or below or between certain price or quantities)
Calculate the producer surplus numerically.
Describe conceptually what the producer surplus is in this context.
The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax
equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario.
PRICE (Dollars per blinkie)
22.00
Demand
28.00–
16.00
A
B
D
F
MOI UM
I
I
E
24
36
QUANTITY (Blinkies)
Complete the following table, given the information presented on the graph.
Result
Equilibrium quantity after tax
Per-unit tax
Price producers receive after tax
$
$
Value
Supply
Concept
Deadweight loss after the tax is imposed
In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply.
Consumer surplus before the tax is imposed
Producer surplus after the tax is imposed
A B
000
□
[]
0
OOO
DE
□ □
C
C
(?)
00
F
□
0
0
Chapter 7 Solutions
Microeconomics
Ch. 7.1 - Prob. 1QCh. 7.1 - Prob. 2QCh. 7.1 - Prob. 3QCh. 7.1 - Prob. 4QCh. 7.1 - Prob. 5QCh. 7.1 - Prob. 6QCh. 7.1 - Prob. 7QCh. 7.1 - Prob. 8QCh. 7.1 - Prob. 9QCh. 7.1 - Prob. 10Q
Ch. 7 - Prob. 1QECh. 7 - Prob. 2QECh. 7 - How is elasticity related to the revenue from a...Ch. 7 - Prob. 4QECh. 7 - Prob. 5QECh. 7 - Prob. 6QECh. 7 - Prob. 7QECh. 7 - Prob. 8QECh. 7 - Prob. 9QECh. 7 - Prob. 10QECh. 7 - Prob. 11QECh. 7 - Prob. 12QECh. 7 - Prob. 13QECh. 7 - Prob. 14QECh. 7 - Prob. 15QECh. 7 - Prob. 16QECh. 7 - Prob. 17QECh. 7 - Prob. 18QECh. 7 - Prob. 19QECh. 7 - Prob. 20QECh. 7 - Prob. 21QECh. 7 - Prob. 22QECh. 7 - Prob. 1QAPCh. 7 - Prob. 2QAPCh. 7 - Prob. 3QAPCh. 7 - Prob. 4QAPCh. 7 - Prob. 5QAPCh. 7 - Prob. 1IPCh. 7 - Prob. 2IPCh. 7 - Prob. 3IPCh. 7 - Prob. 4IPCh. 7 - Prob. 5IPCh. 7 - Prob. 6IP
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Similar questions
- 1.Given the following information Qd = 240 – 5p Qs= P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price. Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. What is the consumer surplus after tax? 2. Given the following information Qd= 240 – 5p Qs = P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price. Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. What is the producer surplus after tax? 3. Given the following information Qd= 240 – 5p Qs= P Where Qd is the quantity demanded, Qs is the quantity supplied and P is the price. Suppose that the government decides to impose a tax of $12 per unit on sellers in this market. What would be the tax revenue?arrow_forwardThe following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per pinckney) 37.50- 30.00 22.50 Demand Result Per-unit A B D с E 2.5 Supply QUANTITY (Pinckneys) Complete the following table, given the information presented on the graph. Equilibrium quantity after tax Price producers receive before tax $ Value ?arrow_forwardSuppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively. Suppose the government imposes a per-unit tax of $45 Some economists believe that a sales tax, in general, is undesirable. Explain. Despite this, why do most countries still impose a tax on cigarette? Explain plausible arguments.arrow_forward
- using the graph answer the following questions: 19. what is the size of consumer surplus when a price ceiling of $5 is imposed? 20. what is the size of producer surplus when a price ceiling of $5 is imposed 21. what is the size of deadweight loss from a price ceiling of $5arrow_forwardThe following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 26.00 18.00 10.00 Demand Result Per-unit tax B D F 33 U 20 E 36 QUANTITY (Blinkies) Complete the following table, given the information presented on the graph. $ Price consumers pay before tax $ Equilibrium quantity before tax Supply Value In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept Producer surplus after the tax is imposed Consumer surplus after the tax is imposed Tax revenue after the tax is imposed A U B 0 0 с 0 0 D 0 0 E 0 F 0 0arrow_forward(e) (i) Calculate the consumer surplus after the tax. 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 ST is the supply curve after the tax. Answer: Answer Price S- 18 Question 18 12 10 (e) (ii) Calculate the producer surplus after the tax. Answer: 10 12 Qua Answer Question 19 (e) (ii) Tax revenue. Answer: Question 20 Price received by producers (e) (iv) Deadweight loss Quantity of cigarettes sold Answer: Price paid by consumers Answer the tax Question 21 (e) (v) Total surplus after tax Answer: S PhotoGridarrow_forward
- Suppose the vertical distance between points S and R represents a tax in the market. Please answer the questions under the case of the tax. What area is the tax revenue to the government? What is the amount of the tax revenue? What area is the consumer surplus represented by? What is the amount of consumer surplus? What area is the producer surplus represented by? What is the amount of producer surplus? What area is the deadweight loss represented by? What is the amount of deadweight loss? What is the buyers’ share of tax burden? What is the sellers’ share of tax burden?arrow_forward1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinke) 56.00 48.00 40.00 Demand B D Supply 40 QUANTITY (Blinkies) Ⓡarrow_forwardDraw a supply and demand graph for cookies, showing the equilibrium price and quantity. On the same graph, assume that the government imposes a $5 tax on cookies. Show on the graph the following: what happens to the price paid by the buyers, what happens to the price received by the sellers, the size of the tax, what happens to the quantity sold, what the consumer surplus is after the tax, what the producer surplus is after the tax, what the government tax revenue is after the tax, and what the deadweight loss is after the tax Use letters to label the different areas on the graph where needed. You don’t need to show any shift of supply or demand 2arrow_forward
- How does a tax on a good affect the price paid by buyers, price receive by sellers, and the quantity sold?arrow_forward1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 56.00 Demand 40.00- 24.00 A 1 8 00 I 11 D 33 3 Supply QUANTITY (Blinkies) ? Darrow_forwardThe following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) Demand Supply A 28.00 B 22.00 16.00 D E F 24 36 QUANTITY (Blinkies) ? 4arrow_forward
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