4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for cigarettes, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per pack) 20 18 16 14 Supply Demand 0 20 40 60 80 100 120 140 160 180 200 QUANTITY (Packs) Suppose the government imposes a $4-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is Graph Input Tool Market for Cigarettes Quantity (Packs) Demand Price (Dollars per pack) Tax (Dollars per pack) 80 12.00 4.00 Supply Price (Dollars per pack) packs, and the government collects $ (?) 8.00 in tax revenue.

4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for cigarettes, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per pack) 20 18 16 14 Supply Demand 0 20 40 60 80 100 120 140 160 180 200 QUANTITY (Packs) Suppose the government imposes a $4-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is Graph Input Tool Market for Cigarettes Quantity (Packs) Demand Price (Dollars per pack) Tax (Dollars per pack) 80 12.00 4.00 Supply Price (Dollars per pack) packs, and the government collects $ (?) 8.00 in tax revenue.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 10PA

See similar textbooks

Similar questions

President Biden has proposed a $2.2 trillion Infrastructure package to repair roads and bridges. Some policy analysts think that at least one part of the funding will be an increase in the federal excise tax on gasoline. Suppose the size of this increase in excise tax is written as t. Using a graph analyze and explain the impact of this t dollars per gallon increase in excise tax on gasoline. Which of the curve(s), if any, would shift, and why? Graphically, show the new equilibrium price and quantity (labeling it P1 and Q1). At the new equilibrium, please determine how much of the tax increase was borne by gasoline consumers and how much was absorbed by gasoline sellers? Indicate the incidence of taxation for both consumers and sellers on the graph and explain. What will determine whether consumers or sellers will bear a higher relative burden of taxation? Please explain in detail.
4. The Laffer curve Government imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for champagne, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. BRUNENSE 8 5 1000 Suppose the government imposes a $10-per-case tax on suppliers. At this tax amount, the equilibrium quantity of champagne is - 700 400 500 430 300 200 100 1000 Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per case. (Hint: To find the equilibrium quantity after the tax, adjust the "Quantity"field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a…
4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool Market for Gin 100 I Quantity (Bottles Demand Price (Dollars per bottle) 90 Supply 56 80 Şupply Price (Dollars per bottle) 60.00 40.00 70 Tax Dollars per bottle) 20.00 * 60 50 40 30 Demand 20 10 0 14 28 42 56 70 84 98 112 126 140 QUANTITY (Bottles) Suppose the government imposes a $20-per-bottle tax on suppliers. At this tax amount, the equilibrium quantity of gin is bottles, and the government collects S in tax revenue. Now calculate the…
3. St Louis area voters recently approved a tax on sales of recreational marijuana. Who would you expect to pay for this tax from an economic perspective - buyers or sellers? Include graphical analysis in your response.
4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per bottle) 100 90 80 20 10 0 0 Supply Demand 14 28 42 56 70 84 98 112 126 140 QUANTITY (Bottles) Graph Input Tool At this tax amount, the equilibrium quantity of gin is Market for Gin Suppose the government imposes a $20-per-bottle tax on suppliers. Quantity (Bottles) Demand Price (Dollars per bottle) Tax (Dollars per bottle) 56 60.00 20.00 Supply Price (Dollars per bottle) bottles, and the government collects $ ? 40.00 in tax revenue.
What is the formula/ way to include tax into these equations. I’m not sure how to graph
A government is considering imposing a tax on a market: in Market 1 the tax would have a significant effect on the price sellers receive, but it would not affect the quantity sold significantly; in Market 2, the same size of tax would have an insignificant effect on the price sellers receive, but it would have a significant effect on the quantity sold. Which market would have the smallest deadweight loss from the tax? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a Market 1 Market 2 It will be the same in Market 1 and 2 We need to know the prices in these markets to answer this question
A 4G 9:06 AM 76% LTE E Economics.pdf O StudyMode BARNES&NOBLE education INSPIRING BETTER GRADES Suppose that a city government introduces a $0.50 excise Market for Bottles of Soda (commodity) tax on consumers of bottles of soda to improve the health of its citizens. Manipulate the accompanying 5.0 graph to demonstrate the impact of the tax on the market for 4.5 soda 4.0 What would be the new equilibrium quantiy if instead of 3.5 taxing consumers, the city taxed producers? 3.0 2.5 thousand bottles 2.0 1.5 D 1.0 0.5 0.0 0 1 2 3 4 5 6 7 8 Quantity (thousands of botles) Price ($/bottle)
The government started imposing a Digital Services Tax (DST) of six per cent on 1 January 2020 on foreign digital service providers (FSPs) in Malaysia You are required explain and discuss to explain the Digital Service Tax (DST) on How is the digital tax going to impact customers?
How would I calculate the government revenue with a tax of $40 using this graph?
Macmillan Learning Suppose that a city government introduces a $0.50 excise (commodity) tax on consumers of bottles of soda to improve the health of its citizens. Manipulate the accompanying graph to demonstrate the impact of the tax on the market for soda. What would be the new equilibrium quantity if instead of taxing consumers, the city taxed producers? 5.0 4.5 4.0 3.5 Market for Bottles of Soda thousand bottles Price ($/bottle) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0 1 2 5 6 3 4 Quantity (thousands of bottles) D 7 8 9 10
Sinead commutes from her suburban residence to the city centre. When asked her opinion of a proposed congestion tax of $5 per trip, she says, “Of course I oppose the congestion tax. It would make me worse off by $5 per trip. What do you think I am, stupid?” Critically appraise Sinead’s statement.