Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 8, Problem 9SPPA
To determine
To state:
Comments on the incidence of tax on sugary drinks and the interpretation about the elasticities and demand for sugary drinks along with the type of tax and the principles that determine whether the tax is fair or unfair.
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33
56. 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
20
4. In order to reduce farm output, raise farm prices, and thus raise farm incomes (revenues), the government pays farmers to set aside a portion of their land from production. Using a graph, explain in terms of the elasticity of demand for farm products why farmers may be better-off when harvests are low even if we ignore the money they receive from the set-aside program.
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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- The government wants to stop obesity in children, so they decide to tax soda producers for each unit of soda sold. If demand for soda is relatively elastic, and supply is relatively inelastic will suppliers or consumers pay a larger share of the tax? Briefly explain why.arrow_forwardConsider the graph at right. Assume that before any tax, firms were willing to supply 5 thousand pounds of lobster at a price of $50 per pound. Use the line drawing tool to draw a new supply curve reflecting a $30 per pound tax. Label this line Carefully follow the instructions above, and only draw the required object Price 90 85 70 65. 65 40 55- 50 19 45 40 35 30 25 20 15 10 54 0 0 1 Quantity (thousands) www 8 10 dduarrow_forwardExplanation it correctlyarrow_forward
- Use the following graph of the market for cases of beer to answer the questions that follow. (Note: You will not be graded on any changes you make to the graph.) 10 Demand Supply Scratch points 8 7 1 2 3 4 5 7 10 Quantity of Beer (Thousands of cases) Complete the first row of the following table by entering the price paid by consumers, the price received by producers, and the quantity of beer sold in the absence of a tax on this market. Тax Price Paid by Consumers Price Received by Producers Quantity of Beer Sold (Dollars per case) (Dollars per case) (Dollars per case) (Thousands of cases) 4 Suppose the federal government requires beer drinkers to pay a $4 tax on each case of beer purchased. (In fact, both the federal and state governments impose beer taxes of some sort.) Complete the second row of the above table by entering the price paid by consumers, the price received by producers, and the quantity of beer sold when beer drinkers pay a $4 tax on each case of beer. True or False:…arrow_forwardTABLE 1 PRICE ELASTICITY OF DEMAND FOR GOODS AND SERVICES Basket of goods and services Price elasticity of demand Basket 1 Airline travel Restaurant meals Fresh fish New cars Basket 2 Cigarettes Coffee Gasoline Electricity Source: The Economy Today (Schiller) d) NNN, 1.2-1.5 PREKI If price of fresh fish keeps on increasing in the market, discuss the type of price control that the government can use to control the increasing price of fresh fish.arrow_forwardSection 4.1: Page 186: 68 Supply and demand for com. At $2.13 per bushel, the annual supply for corn in the Midwest is 8.9 billion bushels and the annual demand Is 6.5 billion bushels. When the price falls to $1.50 per bushel, the annual supply decreases to 8.2 billion bushels and the annual demand increases to 7.4 billion bushels. Assume that the price-supply and price-demand equations are linear. A) Find the price-supply equation. B) Find the price-demand equation. C) Find the supply and demand if bushels of corn are $1.25 per bushel. Discuss the stability of the corn market at this price level. JAN 23 D) Find the equilibrium price and quantity and interpret the meaning. Aarrow_forward
- Typed plz and Asap thanksarrow_forwardName WHAT IS ELASTICITY OF SUPPLY?, CONTINUED APPLICATION Mark It Up! Millions of metric tons 120 110 100 90 80 70 60 50 40 30 20 10 0 Steel and Steel Products Produced in the United States 2000 2001 2002 Key 2003 Steel Steel products Source: U.S. Geological Surve y Minerals Yearbook Date 7. Reread your notes on "What Affects Elasticity of Supply." On the bar graph, label the raw material. On the line below, list some examples of products the bar graph could include. 8. How did the supply of raw material and the supply of finished products change over the years shown in the bar graph? 9. Explain two ways the supplies of the two items shown on the bar graph could be interrelated.arrow_forwardAsap pleasearrow_forward
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