Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
8th Edition
ISBN: 9781337368087
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 1PA
Sub part (a):
To determine
The impact of tax on pizza.
Sub part (b):
To determine
The impact of tax on pizza.
Sub part (c):
To determine
The impact of tax on pizza.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
(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 PhotoGrid
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?
I need both questions
Chapter 8 Solutions
Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
Knowledge Booster
Similar questions
- In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?arrow_forwardThe demand and supply equations for a product are: Q^d=300-6p and Q^x=-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 graph 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 lossarrow_forwardSuppose a local government votes to impose an excise tax of $0.90 per bottle on the sales of bottled water. (Assume that all bottles are identical and residents cannot shop elsewhere.) Before the tax the equilibrium price and quantity are $1.20 and 2000 bottles per day. After the tax is imposed, market equilibrium adjusts to a price of $1.70 and quantity of 1300 bottles per day. a. Draw the supply and demand diagram before and after the excise tax is imposed. 1.) Using the line drawing tool, plot the original and new supply curves and label the lines properly. 2.) Using the point drawing tool, indicate the original and new equilibrium points and label these points properly. Carefully follow the instructions above, and only draw the required objects. Price ($ per bottle) 3.00 2.80- 2.60- 2.40- 2.20- 2.00- 1.80- 1.60- 1.40- 1.20- 1.00- 0.80- 0.60- 0.40- 0.20- 0.00+ 0 1000 2000 Quantity (bottles per day) 10 3000arrow_forward
- Suppose the current equilibrium price of cheese pizzas is $10.00, and 11 million pizzas are sold per month. After the federal government imposes a $3.00 per pizza tax, the equilibrium price of pizzas rises to $12.00, and the equilibrium quantity falls to 9 million. Compare the economic surplus in this market when there is no tax to when there is a tax on pizza. With the tax, the change in economic surplus is O A. the new surplus equal to the area under the demand curve and above the supply curve for the market equilibrium quantity. B. the deadweight loss equal to the area under the demand curve and above the supply curve for units between the quantity with the tax and market equilibrium quantity. O C. the deadweight loss equal to the area under the demand curve and above the supply curve for the quantity with the tax. D. the new surplus equal to the area under the demand curve and above the supply curve for units between the quantity with the tax and market equilibrium quantity. New…arrow_forwardThe market supply and demand for a product are shown in the diagram below. Now supose the government imposes a per-unit tax of $1 on producers. (i) What happens to total revenue received by producers after they pay the tax to the government? Explain. (ii) Will producer surplus increase, decrease, or stay the same? (iii) Will total surplus increase, decrease, or stay the same? Explain.arrow_forward(a) Show the market for housing in equilibrium on a diagram, where demand is less elastic than supply, andlabel the respective consumer and producer surpluses. Discuss whether this market is Pareto efficient. (b) Assume that the State Government imposes a per-unit tax on the sellers of houses. A new diagram,shows the imposition of this tax on the market for housing. Does the imposition of this tax cause a Paretoimprovement to the market, explain? (c) Is the tax imposed in part (b) effective for the collection of Government revenue? Justify your answer withreference to your diagram in part (b).arrow_forward
- Question 27 When the government places a tax on the producer of a good or service O both the supply and demand curves for the good or service shifts to the left. the supply curve for the good or service shifts to the right. O the demand curve for the good or service shifts to the right. the supply curve for the good or service shifts to the left. the demand curve for the good or service shifts to the left.arrow_forwardQUESTION 5 Consider the following demand and supply curves Demand: P = 50+i-70, Supply: P=wages + 30 Where i is income and wis wages If the government places a 10-dollar tax on producers, what would be the resulting consumer surplus?arrow_forwardWhat happens to consumer and producer surplus when the sale of a good is taxed? How doesthe change in consumer and producer surplus compare to the situation when good is not taxed?Explain with the help of graphs.arrow_forward
- 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.arrow_forwardGive typing answer with explanation and conclusion to all parts 1. Suppose that the demand curve for wheat is Q = 200 – 20p and the supply curve is Q = 20p. The government provides producers with a specific subsidy of s = $2 per unit. a. How do the equilibrium price and quantity change? b. What effect does the tax have on consumer surplus, producer surplus, government revenue, and deadweight loss.arrow_forwardSuppose the current equilibrium price of cheese pizzas is $9.00, and 11 million pizzas are sold per month. After the federal government imposes a $3.00 per pizza tax, the equilibrium price of pizzas rises to $10.00, and the equilibrium quantity falls to 9 million. Compare the economic surplus in this market when there is no tax to when there is a tax on pizza. With the tax, the change in economic surplus is A. the new surplus equal to the area under the demand curve and above the supply curve for units between the quantity with the tax and market equilibrium quantity. B. the deadweight loss equal to the area under the demand curve and above the supply curve for units between the quantity with the tax and market equilibrium quantity. C. the new surplus equal to the area under the demand curve and above the supply curve for the market equilibrium quantity. D. the deadweight loss equal to the area under the demand curve and above the supply curve for the quantity with the tax. New…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics, 7th Edition (MindTap Cou...EconomicsISBN:9781285165875Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)EconomicsISBN:9781285165912Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)EconomicsISBN:9781305971493Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of MicroeconomicsEconomicsISBN:9781305156050Author:N. Gregory MankiwPublisher:Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:9781285165912
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning