The impact of tax on the market of socks.

Question

If the government wants to raise tax revenue, which of the following items are good candidates for an excise tax? Choose one or more: A. toilet paper B. automobile tires C. cigarettes D. sweet potatoes

Answer 1

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 7PA

Subpart (a):

To determine

The impact of tax on the market of socks.

Sub part(b):

To determine

The impact of tax on the market of socks.

Sub part(c):

To determine

The impact of tax on the market of socks.

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If the government wants to raise tax revenue, which of the following items are good candidates for an excise tax? Choose one or more: A. toilet paper B. automobile tires C. cigarettes D. sweet potatoes

Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer purchased. a.Draw a supply and demand diagram of the market for beer without the tax.Show the price paid by consumers ,the price received by producers,and the quantity of beer sold.What is the difference between the price paid by consumers and the price received by the producers? b.Now draw a supply and demand diagram for the beer market with the tax.Show the price paid by consumers ,the price received by producers,and the quantity of beer sold.What is the difference between the price paid by consumers and the price received by the producers?Has the quantity of beer sold increased or decreased?

Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer purchased. a. Draw a supply and demand diagram of the market for beer without the tax. Show the price paid by consumers, the price received by producers and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by produers? b.Draw a supply and demand diagram for the beer market with the tax. Show the price paid by consumers, the price received by producers and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by producers? Has the quantity of beer sold increased or decreased? C. Can you identify and government revenues? d. Is there and inefficiency, and if so, can you define it and label it on the graph? e. If the producer has an inelastic supply curve, which market participant has the bigger tax brden? Explain.

Answer 2

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 7PA

Subpart (a):

To determine

The impact of tax on the market of socks.

Sub part(b):

To determine

The impact of tax on the market of socks.

Sub part(c):

To determine

The impact of tax on the market of socks.

Expert Solution & Answer

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See solution

Check out sample textbook solution

Answer 3

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 7PA

Subpart (a):

To determine

The impact of tax on the market of socks.

Sub part(b):

To determine

The impact of tax on the market of socks.

Sub part(c):

To determine

The impact of tax on the market of socks.

Expert Solution & Answer

Trending nowThis is a popular solution!

See solution

Check out sample textbook solution

Answer 4

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 8, Problem 7PA

Subpart (a):

To determine