Suppose the equilibrium price and quantity in a market are P=$3 and Q=40. If there is a ten cent tax placed on the sale of the good which lowers the equilibrium quantity to 38 units, what is government revenue in this market? $2.00 $3.90 $3.80 2.90
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- Suppose demand is D and supply is S0 so that equilibrium price is $10. If an excise tax of $6 is imposed on this product, what happens to the equilibrium price paid by consumers? The price received by producers? The number of units sold?Equilibrium price paid by consumers: $ Price received by producers: $ Number of units sold:1. The equilibrium price of juice was initially $1.80 per bottle, and the equilibrium quantity was 8,000 bottles per day. When the government imposed a tax of $0.50 per bottle, the price went up to $2.18 per bottle, and quantity fell by 12%. A) How much of the tax (in $/bottle) are the buyers paying? B) How much of the tax (in $/bottle) is shouldered by the sellers? C) After the tax is imposed, how many bottles will be consumed?Suppose the government imposes a $10 per unit tax on a good (see diagram below) causing buyers to pay $18 for the item compared with an original equilibrium price of $12. What is the tax revenue the government collects from the sale of this item? Price 24 22 20 18 Supply 16- 14- 12 10 H 6+ 4 K M Demand 2+ 3 6 9 12 15 18 21 24 27 30 33 36 39 Quantity $100 $80 $120 $60 MacBook Air 吕口 F9 F10 F3 F4 F5 F6 F7 F8 % & 4 7 8 9.
- Suppose a $1 excise or commodity tax is placed on the purchasers of cans of soda. Use the graph to illustrate the impact this tax would have on the soda market and answer the questions. Be certain to shift the entire curve, endpoint to endpoint. Price per can (5) 10 9 8 7 3 2 1 0 1 deadweight loss: $ 0123456789 10 11 12 13 14 15 16 17 18 19 20 Cans of soda per day (in tens of thousands) Calculate the deadweight loss of the tax. Enter the answer in thousands. Supply Demand deadweight loss: $ 0123456789 10 11 12 13 14 15 16 17 18 19 20 Cans of soda per day (in tens of thousands) Demand Calculate the deadweight loss of the tax. Enter the answer in thousands. The tax would affect a household's Choose the answer that best describes the impact this tax would have on a household's economic income and whether it would cause a large change in the household's consumption of soda. This sort of change in behavior is called tax shifting. O uses side, but tax shifting is not likely to occur. O…Suppose the demand for cigarettes is Q = 15 - 0.5Pand the supply of cigarettes is Q = P - 3, where P is the price per pack of cigarettes. Suppose the government imposes a cigarette tax of $3 per pack. (a) What is the price paid by producers and price faced by consumers? (b) What is the government revenue from the tax and What is the total dollar amount of tax revenue that is ultimately paid by consumers (i.e. consumers' tax burden)? (c) What is the excess burden of the tax?Price S1 20 18 16 14 12 10 SO Demand 300 400 500 1000 Quantity Suppose that the market in the graph above is at an initial equilibrium price of $10 and an equilibrium quantity of 500 units. If the government decides to add a $4 per-unit tax on this good, the equilibrium price will change to: $12 $8 $14 $4 2086 420
- Suppose the market demand for milk is Qd = 40 – 4P Where Qd is millions of gallons demanded and P is price per gallon. Suppose the market supply for milk is Qs = - 40/3 + 20/3P Suppose a tax of $1 per gallon of milk is imposed in this market. What is the new price paid by consumers and What is the quantity of milk sold? *Hint: It does not matter if the tax is collected from purchasers or sellers.The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 26.00 18.00 10.00 Demand Result Per-unit tax B D F 33 U 20 E 36 QUANTITY (Blinkies) Complete the following table, given the information presented on the graph. $ Price consumers pay before tax $ Equilibrium quantity before tax Supply Value In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept Producer surplus after the tax is imposed Consumer surplus after the tax is imposed Tax revenue after the tax is imposed A U B 0 0 с 0 0 D 0 0 E 0 F 0 0Consider a market with an equilibrium quantity of 100 and an equilibrium price of $40. Suppose the government imposes a $20 tax per unit on consumers, after which the quantity sold in the market reduces to 70. What is the deadweight loss of the tax and government revenue from tax? A deadweight loss of $300 and a government tax revenue of $1400. A deadweight loss of $600 and a government tax revenue of $1400. A deadweight loss of $300 and government tax revenue of $600. A deadweight loss of $600 and a government tax revenue of $600.
- Price 20 18 16 14 12 10 х $1.200 0 300 400 500 $2.000 S1 SO Quantity Assume that the market in the graph above is at an initial equilibrium price of $10 and an equilibrium quantity of 500 units. If the government decides to add a $4 per-unit tax on this good, it will be able to collect the following amount of tax revenue: Demand 1000QD=50 – 2 P + 0.5 PR and Qs = -4 + P. Here PR if the price of a related good. What is the equilibrium price and quantity if PR =Rs. 10? Plot the demand and supply curve and show the equilibrium in the same plot. If govt. imposes tax on the related good by Rs.2 per unit, then how the equilibrium will change? Do buyers of the commodity bear the whole burden of the excise duty?The following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per pinckney) 37.50- 30.00 22.50 Demand Result Per-unit A B D с E 2.5 Supply QUANTITY (Pinckneys) Complete the following table, given the information presented on the graph. Equilibrium quantity after tax Price producers receive before tax $ Value ?