Instead, suppose the government taxes bucket hats. The following graph shows the annual supply and demand for this good, as well as the supply curve shifted up by the amount of the proposed tax ($30 per hat). On the following graph, do for bucket hats the same thing you did previously on the graph for windbreakers. Use the green rectangle (triangle symbols) to shade the area that represents tax revenue for bucket hats. Then, use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. PRICE (Dollars per hat) 8 55 50 45 40 35 30 25 20 15 10 5 S+Tax Bucket Hats Market Supply 0 0 50 100 150 200 250 300 350 400 450 500 550 600 QUANTITY (Hats) If the Government Taxes... Windbreakers at $30 per windbreaker Bucket hats at $30 per hat Tax Revenue Deadweight Loss ? Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. Tax Revenue (Dollars) Deadweight Loss (Dollars) Suppose the government wants to tax the good that will generate more tax revenue at a lower welfare cost. In this case, it should tax because, all else held constant, taxing a good with a relatively ✓ elastic demand generates larger tax revenue and smaller deadweight loss.
Instead, suppose the government taxes bucket hats. The following graph shows the annual supply and demand for this good, as well as the supply curve shifted up by the amount of the proposed tax ($30 per hat). On the following graph, do for bucket hats the same thing you did previously on the graph for windbreakers. Use the green rectangle (triangle symbols) to shade the area that represents tax revenue for bucket hats. Then, use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. PRICE (Dollars per hat) 8 55 50 45 40 35 30 25 20 15 10 5 S+Tax Bucket Hats Market Supply 0 0 50 100 150 200 250 300 350 400 450 500 550 600 QUANTITY (Hats) If the Government Taxes... Windbreakers at $30 per windbreaker Bucket hats at $30 per hat Tax Revenue Deadweight Loss ? Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. Tax Revenue (Dollars) Deadweight Loss (Dollars) Suppose the government wants to tax the good that will generate more tax revenue at a lower welfare cost. In this case, it should tax because, all else held constant, taxing a good with a relatively ✓ elastic demand generates larger tax revenue and smaller deadweight loss.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter12: The Cost Of Production
Section: Chapter Questions
Problem 8PA
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Can someone please help me with these question? And also shading out the graphs :)
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