2. Taxes and welfare Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the governme taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer purses in the absence of a tax. Then point (triangle symbol) to shade the area representing total consumer surplus (cs) at the equilibrium price. Next, use the purple poin symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before Tax Demand 200 180 Equilibrium 180 A 140 120 Consumer Surplus 100 Supply 80 Producer Surplus 60 40 20 10 20 30 40 50 60 70 80 90 100 QUANTITY (Purses) Suppose the government imposes an excise tax on designer purses. The black line on the following graph shows the tax wedge create per purse. First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbo area representing total consunmer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representingt PRICE (Dollars per purse)

2. Taxes and welfare Consider the market for designer purses. The following graph shows the demand and supply for designer purses before the governme taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer purses in the absence of a tax. Then point (triangle symbol) to shade the area representing total consumer surplus (cs) at the equilibrium price. Next, use the purple poin symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before Tax Demand 200 180 Equilibrium 180 A 140 120 Consumer Surplus 100 Supply 80 Producer Surplus 60 40 20 10 20 30 40 50 60 70 80 90 100 QUANTITY (Purses) Suppose the government imposes an excise tax on designer purses. The black line on the following graph shows the tax wedge create per purse. First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbo area representing total consunmer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representingt PRICE (Dollars per purse)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Suppose a tax is levied in the market for soda. Consider a $0.50 excise tax on producers for each soda sold. The graph illustrates the demand and supply curves for soda both before and after the tax is levied. Use the graph below to answer the remaining parts of this question. d. What is the consumer surplus generated after the imposition of the tax? Shade in this area on the graph. Instructions: Use the tool provided “CStax” to illustrate this area on the graph. Consumer surplus after the imposition of the tax is $ thousand. e. What is the producer surplus generated after the imposition of the tax? Shade in this area on the graph. Instructions: Use the tool provided “PStax” to illustrate this area on the graph. Producer surplus after the imposition of the tax is $ thousand. f. What is the total revenue generated from the tax? Shade in this area on the graph. Instructions: Use the tool provided “TR” to illustrate this area on the graph. Tax…
3. In the market for Samsung Galaxy S22, the demand function is Q = 200 - 2P, while the supply function is Q = 2P - 20, where P denotes the price, and Q the quantity of Samsung Galaxy S22. a. Calculate the equilibrium price and quantity! b. To reduce addiction to social media, the government imposes a specific tax of $5 on sellers. Calculate the new equilibrium price and quantity c. Now suppose the tax of $5 is imposed on buyers rather than sellers. Find the new equilibrium price and quantity.
Next question at The graph shows the demand curve for wallets and the market price of a wallet. Price (dollars per wallet) 18.00- 16.00- Draw a point that shows the value of the 30th wallet. Label it 1. 14.00- Draw a point that shows the willingness to pay for the 45th wallet. Label it 2. 12.00- Draw an arrow that shows the consumer surplus on the 45th wallet. Label it CS. 10.00- 8.00- What is the consumer surplus on the 45th wallet? 6.00- Market The consumer surplus on the 45th wallet is $. price 4.00- >>> Answer to 2 decimal places. 2.00 em 0.00 15 30 45 60 75 90 105 As Quantity (wallets per day) >>> Draw only the objects specified in the question. Ass O Time Remaining: 00:53:47 Next ced se (ECON202 s2022 online) is based on Bade/Parkin: Foundations of Microeconomics, 9e
Suppose 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 price
1. Price 10 D, 10 15 Quantity The above graph shows a market with a tax imposed on consumers of a good. (a) On the graph, shade or label the region equal to the deadweight loss of the tax. Calculate the size of the deadweight loss. (b) On the graph, shade or label the region equal to the tax revenue from the tax. Calculate the size of the tax revenue.
Price Controls and Quotas ― End of Chapter Problem The Venezuelan government has imposed a price ceiling on the retail price of roasted coffee beans. The accompanying diagram shows the market for coffee beans. In the absence of price controls, the equilibrium is at point E, with an equilibrium price of PE and an equilibrium quantity bought and sold of QE. After the introduction of the price ceiling, the price falls to Pc and the quantity bought and sold falls to Qc. a. Show the consumer surplus after the introduction of the price ceiling by using the shape CS (assuming that the consumers with the highest willingness to pay get to buy the available coffee beans; that is, assuming that there is no inefficient allocation to consumers). b. Show the producer surplus after the introduction of the price ceiling by using the shape PS (assuming that the producers with the lowest cost get to sell their coffee beans; that is, assuming that there is no inefficient allocation of sales among…
The diagram below shows demand and supply curve for Kimchi. The government imposes per-unit of tax on the Kimchi and this is shown by the shift of the supply curve from 50 to S1. Answer the following questions based on the diagram. Price (RM) SO 10 8 4 Quantity 50 100 a. Define market equilibrium. Determine the equilibrium price and quantity of Kimchi before and after the tax. (4 marks) DO
7 The equilibrium price of a good is $15. Suppose the government introduces a tax on this good. In this case, the price paid by consumers is 1.4 times more than the equilibrium price, and the price received by producers is 1.2 times less than the equilibrium price. Calculate the amount of tax per good. Enter your answer in the box below and round to two decimal places if necessary.
A). Draw the supply and demand curves for the market of specific good. B). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price ceiling of $3 what happens? Draw the new graph explaining how quantities are affected by that decision. C). Suppose that the equilibrium price for this product is $4 and the equilibrium quantity is 100 units. If the government imposes a price floor of $5 what happens? Draw the new graph explaining how quantities are affected by that decision.
8. Use the following graph to answer this question. ↑price S aftertax 7. 65 6 55 45 4 35 25 15 1 D 05 10 15 20 25 30 35 40 45 50 55 60 65 70 quantity As the figure is The equilibrium price in the market before the tax is imposed is drawn, are responsible for sending the tax payment to the government. and the effective price The price paid by buyers after the tax is imposed is sellers receive after the tax is imposed is The amount of the tax per unit is tax per unit and sellers pay Buyers pay of the of the tax per unit. The total tax revenue that the tax generates for the government is
Ann and Bill each spend $30 per month on cigarettes when the price is $1 per pack. Draw a graph to illustrate that the consumer with the less elastic demand will suffer the greater loss of consumer surplus when the price of cigarettes increases. Explain and label the figure
Suppose 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 3000