Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 8, Problem 5SPPA
To determine
To compute:
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The following graph shows the daily market for wine. Suppose the government institutes a tax of $11.60 per bottle. This places a wedge between the
price buyers pay and the price sellers receive.
(?
50
45
40
Supply
35
Tax Wedge
10
5
Demand
50
100
150
200
250
300 350
400
450
500
QUANTITY (Bottles of wine)
PRICE (Dollars per bottle)
The following is a Table that contains the demand and supply schedules of chocolate
ice-creams.
Price
(cents per ice-cream)
$0.90
0.80
0.70
0.60
0.50
0.40
Quantity Demanded
(millions per day)
1
asifWNH
2
3
4
5
6
Quantity Supplied
(millions per day)
7
6
10 10
5
4
3
2
a) If there is no tax on ice-creams, what is their price and how many are produced
and consumed?
b) If a tax of $0.20 cents is imposed on every ice-cream consumed, what happens to
the price of an ice-cream and the number produced and consumed? Illustrate the
effects of this policy on the market for chocolate ice-creams.
c) How much tax does the government collect and who pays it?
Look at chart in first picture and answer what is in second picture
Chapter 8 Solutions
Foundations of Economics (8th Edition)
Ch. 8 - Prob. 1SPPACh. 8 - Prob. 2SPPACh. 8 - Prob. 3SPPACh. 8 - Prob. 4SPPACh. 8 - Prob. 5SPPACh. 8 - Prob. 6SPPACh. 8 - Prob. 7SPPACh. 8 - Prob. 8SPPACh. 8 - Prob. 9SPPACh. 8 - Prob. 10SPPA
Ch. 8 - Prob. 1IAPACh. 8 - Prob. 2IAPACh. 8 - Prob. 3IAPACh. 8 - Prob. 4IAPACh. 8 - Prob. 5IAPACh. 8 - Prob. 6IAPACh. 8 - Prob. 7IAPACh. 8 - Prob. 8IAPACh. 8 - Prob. 9IAPACh. 8 - Prob. 10IAPACh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQ
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- Question 13arrow_forwardSuppose that the government imposes a tax on eigarettes. Use the diagram below to answer the questions. Dis the demand curve before tax, S is the supply curve before tax and Sis the supply curve after the tax Price 18 12 10 10 12 Qua (a) For the market for cigarettes without the tax indicate: (0) Price paid by consumers (8) Price paid by producers () Quantity of cigarettes sold (w) Buyer's reservation pricearrow_forwardmicro question 8arrow_forward
- The 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_forwardfrom the image calculate for the market with cigarettes after tax the tax the price paid by consumers price received by producers quantity of cigarettes soldarrow_forwardPls solve it quicklyarrow_forward
- 8. Suppose we want regular cars to be gradually replaced by electric cars. There are several kinds of government interventions that could be used to make this happen, or at least to push the car market to produce and sell more electric cars. Explain how a tax could be used for this purpose, and then explain how a subsidy could be used for this purpose.arrow_forward56. Table 3.10 shows the supply and demand for movie tickets in a city. Graph demand and supply and identify the equilibrium. Then calculate in a table and graph the effect of the following two changes. 1. Three new nightclubs open. They offer decent bands and have no cover charge, but make their money by selling food and drink. As a result, demand for movie tickets falls by six units at every price. 2. The city eliminates a tax that it placed on all local entertainment businesses. The result is that the quantity supplied of movies at any given price increases by 10%. Price per Pound Qd Qs $5.00 26 16 $6.00 24 18 $7.00 22 20 $8.00 21 21 $9.00 22 Table 3.10 20arrow_forwardUsing the table below answer the following question Price Quantity demanded Quantity supplied $300 60 30 $400 55 40 $500 50 50 $600 45 60 $700 40 70 $800 35 80 In response, to lobbying by the skate board association, the government places aprice ceiling of $400 on skate boards. Use the information provided in Table toplot the supply and demand curve for skate boards.arrow_forward
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