Given a demand curve of P = 102 - 0.5Q and a supply curve of P = 10 + 1.5Q, consider a subsidy of 16 and a tax of 8. Solve for the resulting quantity (Answer 1) and the resulting deadweight loss (Answer 2). Blank # 1 Blank # 2

Given a demand curve of P = 102 - 0.5Q and a supply curve of P = 10 + 1.5Q, consider a subsidy of 16 and a tax of 8. Solve for the resulting quantity (Answer 1) and the resulting deadweight loss (Answer 2). Blank # 1 Blank # 2

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 1AQ

See similar textbooks

Related questions

Q: Part C: Using Price Indexes The following question has 5 parts (a.-e.), parts d. and e. will be…

A: Inflation rate between 2 periods t & t+1 is given as = [(price index in t+1 - price index in t)/…

Q: Which of the following would be considered an environmental obstacle to good performance? Select an…

A: Employers are always concerned about the performance of their workers and employees. This is because…

Q: Two options are available for setting up a wireless meter scanner and controller. A simple setup is…

A: Incremental cash flow refers to the net change in a company's cash inflows and outflows resulting…

Q: When the investment accelerator is large, expansionary fiscal policy is investment accelerator is…

A: Expansionary fiscal policy refers to the money supply in the economy by the government. This is done…

Q: At the beginning of this year, daily consumption of gasoline in the US amounted to 344 million…

A: Price elasticity of demand is the study of how demand for a product changes in response to changes…

Q: If next year’s aggregate price level is $4, what must their wage be next year so that the workers…

A: Real value does not include the effect of inflation. Nominal value includes the effect of…

Q: Give one real life situation example for 7 Principles of Engineering Economy 7. Revisit your…

A: " Note: The question has been answered in a generalized manner." Engineering economy deals with the…

Q: Read the material below and answer the question. Baten (ed.), A History of the World Economy: 1500…

A: Osamu Saito's chapter on Japan in "A History of the World Economy: 1500 to the present" provides a…

Q: 9+ Switzerland * Hong Kong - 10 United States The list above shows 58,551 56.701 55.805 O Gross…

A: Standard of Living refers to the level of comfort enjoyed a person or group. One of the main…

Q: What is the main issue in an monopoly Market. Is Google a monopoly?

A: A single firm possesses a sizable amount of market power and is the only supplier of a good or…

Q: In your own words, describe a cashless society?

A: Most economists believe that money evolved as a trading medium because it was more flexible than…

Q: Show how to derive an IS curve that includes the consumption multiplier. That is, assume investment…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: An equipment costing $57,500 is being considered for a production process at Dewey Chemicals. The…

A: A rate of return (RoR) is the net profit or loss of an investment over a particular time period,…

Q: Between 1950 and 2020, the price of wheat fell dramatically from $20.23 per bushel to $4.85 per…

A: When the percentage change in the amount of the good or service desired exceeds the percentage…

Q: S=20+20P and D = 100-20P are Home's supply and demand curves for wheat. S = 40 + 20P and D = 80-20P…

A: Foreign trade, more commonly known as international trade has grown significantly over the last 60…

Q: A tax on gasoline is proposed in order to raise money for the pollution-control activities of…

A: The income that a government collects from different taxes imposed on people, companies, and other…

Q: Lucy is tempted to buy 200 apples, with each one costing $2. However, she realizes that if she saves…

A: Nominal return refers to the total percentage increase or decreaseπs in an investment or asset's…

Q: Question 7 A consumer has a utility function 100-(x₁-4)4 -(x2-3)4 and a budget constraint of 9x1+3x2…

A: In this case, we have to calculate utility function and amount of good 2 and for this we have to use…

Q: The aggregate demand for the mushroom pasta for each day is given by q = 200 - 4p, where p is the…

A: Given, q = 200 - 4p Price, p = $20 Q = 200 - 4p Putting P = $20 We get, Q = 200 - 4*20 Q = 200 -…

Q: A town in Wyoming wants to drill a geothermal well to provide district heating steam and hot water…

A: IRR is a rate of discount that makes the net present value (NPV) for the entire cash flows equal to…

Q: At the profit-maximizing output and price, the shop's profit is equal to $ Given the…

A: Whether a firm will enjoy a profit or incur a loss depends upon the price and the average total…

Q: The following table describes the aggregate demand curve, where real GDP is expressed as the percent…

A: Inflation is a sustained increase in the general price level of goods and services in an economy…

Q: 2. The economy of Newland is in short-run macroeconomic equilibrium. The current real output is $400…

A: The aggregate demand is given as: AD = C + I + G + NX C : consumption expenditure & G :…

Q: John and Belle consume only two goods, x and y. They have strictly convex preferences and no kinks…

A: Marginal utility: The utility can be derived from the satisfaction earned from consuming different…

Q: I'm having trouble deciding whether to work a full shift or work overtime as well. If I work the…

A: The marginal cost refers to the change in the total cost when worker works for additional one hour.…

Q: 4. Sectoral shifts, frictional unemployment, and job searches The Suppose the world price of tobacco…

A: Unemployment is a situation in which a person who is able to and willing to work is not able to find…

Q: When making a decision such as buying a car, what step in the decision-making model would be ranking…

A: Making decisions requires choosing a plan of action, gathering information, and assessing…

Q: For each of the following transactions, show the two entries in the US balance of payments. For each…

A: A country's overall economic interactions with the rest of the world over a specific time period are…

Q: Year Units of Output Price of Bagel per Unit Price Index (Year 1 = 100) 1 10 $ 10 100 2 12 20 200 3…

A: Year Units of Output Price of Bagel per Unit Price Index (Year 1 = 100) 1 10 $ 10 100 2 12 20…

Q: What is the cost function of f(*1; 2) = min{1, ₂} evaluated at (w1, W2, y) = (5, 10, 2)?

A: Cost function measures the minimum cost of producing a given level of output for some fixed factor…

Q: There are 59 employees. The impact of pollution in employees is $759447 and the value of a…

A: Given: The impact of pollution on employees is $759447 statistical life is $8mn

Q: 10. Total economic surplus The following graph plots the supply and demand curves in the market for…

A: In terms of economics, the consumer surplus is the difference between the price a consumer pays for…

Q: Last year real GDP per person in the imaginary nation of Olympus was $4,260. The year before it was…

A: When a country's economic output is adjusted with respect to inflation, it is called Real GDP. Real…

Q: Question 3 Draw indifference curves for the following sets of preferences and indicate the direction…

A: An indifference curve is a graph that displays possible pairings of two commodities or commodities…

Q: Question Now we introduce banks that will act as liquidity providers in the economy. Suppose that…

A: A bank is a financial institution that takes customer deposits and uses those deposits to make loans…

Q: Which of the following is an example of a hidden-market transaction? Question 14 options: A…

A: Hidden market transactions are those economic activities that occur outside of the formal market or…

Q: If a family has saved up $10.345 dollars and would like to buy an annuity that pays them equal…

A: An annuity is a financial product that offers a series of payments over a predetermined length of…

Q: Consider the following short-run production function (where L = variable input, Q = output):…

A: Marginal and average products: The production function determines all possible input bundles that…

Q: A manufacturer has been ordered to stop discharging acidic waste into the city sewer. Your analysis…

A: Net present value (NPV) can be applied to determine the current value of a future flows of payments…

Q: For each demand function, find an expression for the price elasticity of demand. 1. D(p)=60−p 2.…

A: The responsiveness of the quantity of a good or service's demand to a change in price is known as…

Q: Required information A government-funded wind-based electric power generation company in the…

A: The BC ratio, or Benefit-Cost ratio, is a measure used in economics to evaluate the financial and…

Q: 1.The economy of Country X is in equilibrium at full employment. (a) Draw a correctly labeled graph…

A: Equilibrium in an economy is the point where the aggregate supply of that economy is equal to the…

Q: What drove changes in policy for life and debt and What impacts did they have on the local food…

A: Debt burden refers to the amount of debt that a country or an individual owes to creditors. It is…

Q: expansion cost $2.3 million and added an estimated 90,000 tons of reserves. 3 15 70 Year Volume,…

A: Cost depletion is one of two accounting methods utilized to allocate the costs of extracting natural…

Q: Adam's expenditures on food for three consecutive years, along with other values, are presented in…

A: Inflation is the rate of price growth across a given time period. Inflation is sometimes quantified…

Q: Aerotron Electronics is considering purchasing a water filtration system to assist in circuit board…

A: Given information Year 0: Initial investment of $37,000 Year 1-7: Operating and maintenance expenses…

Q: Voluntary donations to the poor… are likely to result in an undersupply of income redistribution to…

A: MSB stands for Marginal Social Benefit, which refers to the additional benefit to society that…

Q: f a tax of $1.20 is imposed on consumers in this market, what is the new consumer surplus? a.…

A: Tax = 1.2 Equilibrium Price = 1.5 Equilibrium Quantity = 30000

Q: A firm's production technology is Y = A * K^0.25 * L^0.75, where the technology level A=8. For such…

A: A mathematical link between the inputs utilized in the manufacturing process and the finished…

Q: Consider the Marshallian (uncompensated) demand (Pz. Py, 1) = In case of a price increase for good…

A: Introduction A Marshallian demand (also called an ordinary demand) represents how much utility…

Question

100%

Given a demand curve of P = 102 - 0.5Q and a supply curve of P = 10 + 1.5Q,
consider a subsidy of 16 and a tax of 8.
Solve for the resulting quantity (Answer 1) and the resulting deadweight loss
(Answer 2).
Blank # 1
Blank # 2
A
A/

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

the government has imposed an indirect tax on good A and the coefficient of the price elasticity of demand is <1. Explain and demonstrate with the use of appropriate diagrams the effect of this tax on both the buyer and seller. indicate in your diagram by shading the regions in different colours the price paid by consumer and price paid by supplier.
The supply of book is perfectly elastic at a price of 200. The demand curve of consumer is given by the function Q=30000000-125000P, suppose that a 80 percent subsidy is imposed on the producer of book. calculate the excess burden resulting from the tax
Suppose an economist estimates the price elasticity of demand for sugary drinks is -4.2, while its price elasticity of supply is 1.2. If the government decides to impose a per-unit tax of $9 per can of sugary drinks sold, how would the market price of sugary drinks be affected? Show your calculation
The government has imposed an indirect tax on good A and the coefficient of the price elasticity of demand is >1? Explain and demonstrate with the use of appropriate diagrams the effect of this tax on both buyer and seller?
4) The demand and supply functions of shirts are respectively given by; Q = 200-5P and Q =-120+10P %3D a) Find the equilibrium price and quantity b) If a tax of GHC8.00 per unit is imposed calculate the equilibrium price and quantity c) What is the distribution of tax to the consumer and the producer? d) Analyse the introduction of price minimum of GHC20 on the good in the market e) Calculate the values of consumer and producer surplus at the market equilibrium f) If the total cost of the firm is TC = 0.8Q²+30Q-5, find the quantity to be produced at the break-even point
The demand and supply equations for a product are: Q* = 0.2 300 – 6P and Q' = -40 + 6P. Determine the market equilibrium and draw graphs. Suppose that the government decides to impose a flat tax of 10% on each unit sold. Show that the price that consumers pay would be the same if the government imposed a tax of Rs. 1.70 per unit sold. Draw graphs and explain. Also calculate the total revenue earned by sellers before and after the tax, the tax revenue raised by the government, changes in consumer and producers surplus and dead weight loss.
3) Consider a commodity X whose demand function is 100-2P and which has a perfectly elastic supply curve. Initial price of the commodity is 40 $ . When the government puts a subsidy of 10% on X answer the following by drawing a graph a) Find the price after the subsidy. b) How much does the government pay as subsidy? c) Is there excess burden? If so, how much?
Suppose that the demand for digital picture frames is price elastic and the supply of digital picture frames is price inelastic. By what amount will a tax of $1.00 per frame levied on buyers of picture frames increase the equilibrium price paid by buyers of picture frames? by less than $0.50 by $1.00 by more than $0.50 but less than $1.00 by more than $1.00
If a tax of $1.20 is imposed on consumers in this market, what is the tax revenue?
The government has imposed an indirect tax on good A and the coefficient of the price elasticity of demand is > 1. Explain and demonstrate with the use of appropriate diagrams the effect of this tax on both the buyer and seller? Indicate in your diagram by shading the regions in different colors the price paid by consumer and price paid by supplier
The elasticity for demand of widgets is equal to -2. The deadweight loss caused by a tax on widgets is equal to zero when: A) none of the other answers B) the elasticity of supply is equal to zero C)the elasticity of supply is infinite D) the economic & statutory incidence are the same.
Suppose that the demand and supply functions for a good are given as follows: Demand: 0-720-8P Supply: Q =-160 + 3P What is the price elasticity of demand at the equilibrium when there is no tax? 0.5 1.25