28) If the government puts a $2 excise tax on a product and as a result, price rises by $0.75, 28)which of the following statements is correct?170605040A) The sellers pay more of the tax than the buyers.B) The buyers pay more of the tax than the sellers.C) The government's tax revenue falls.D) The quantity demanded of the product falls by 37.5%.E) The quantity demanded of the product rises by 37.5%The graph below illustrates three demand curves.IDI240 400 540 720Quantity per day29) Refer to the graph above to answer this question. Which of the following statements iscorrect?A) The price elasticity of demand between points A and B on D₂ is 0.5.B) DI illustrates an inferior good.C) The slope of all three demand curves is constant.D) The shift from D₁ to D₂ could illustrate a change in the quantity demanded for aproduct as a result of a decrease in the price of a substitute good.30) Refer to the graph above to answer this question. Which of the following statements is 30)correct?A) The price elasticity of demand between points A and C on D3 is 0.267.B) The price elasticity of demand between points A and C on D3 is 0.375.C) The demand between points A and C on D3 is elastic.D) The slope of demand curve D, and its price elasticity are the same.31) If a product has few substitutes, which of the following statements is correct?A) It is likely that its income elasticity is high.B) It is likely that it is an inferior product.C) It is likely that its supply elasticity is high.D) It is likely that its price elasticity of demand is low.29)32) The Dean of Arts recently announced a 20% increase in tuition and explained that theincrease was needed to raise the university's revenue. Which of the following might theDean be assuming about the elasticity of demand for education at her school?A) It is elastic.B) It is inelastic.C) It is perfectly elastic.D) It could be either elastic or perfectly elastic.31)32)

28) If the government puts a $2 excise tax on a product and as a result, price rises by $0.75, 28) which of the following statements is correct? A) The sellers pay more of the tax than the buyers. B) The buyers pay more of the tax than the sellers. C) The government's tax revenue falls. D) The quantity demanded of the product falls by 37.5%. E) The quantity demanded of the product rises by 37.5%

28) If the government puts a $2 excise tax on a product and as a result, price rises by $0.75, 28) which of the following statements is correct? A) The sellers pay more of the tax than the buyers. B) The buyers pay more of the tax than the sellers. C) The government's tax revenue falls. D) The quantity demanded of the product falls by 37.5%. E) The quantity demanded of the product rises by 37.5%

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter6: Demand And Elasticity

Section: Chapter Questions

Problem 3TY

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Case II: Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: 1. Buyers would spend a total of $____________ million on soft drinks. 2. Sellers would receive a total of $____________ million (after-tax) from selling soft drinks. 3. The government revenue from this tax would be $_____________ million.
Why type of good are the best choice for levying or applying an excise tax? A. Goods that are considered “luxury goods” (boats, fragrances, designer-label clothing) B. Goods that are relatively inexpensive C. Good with very few substitutes (I.e., tobacco, alcohol, pharmaceuticals) D. Goods that represent a large share of consumer income in their purchase. E. Good that have many substitutes available.
Question 29 When a excise tax is placed on the seller of a good: a the buyer is likely to pay a higher price and the seller is likely to receive a lower price from the sale of the good once the tax is considered. b the buyer is likely to pay a higher price and the seller is likely to receive the original price from the sale of the good once the tax is considered. c the buyer is likely to pay the original price and the seller is likely to receive a lower price from the sale of the good once the tax is considered. d the seller is likely to receive a higher price from the sale and the buyer is likely to pay a lower price for the good once the tax is considered.
Assume that demand and supply for a product over a period of time, respectively, are: Qdx = 15 - 0.5Px and Qsx = 0.25Px - 3. (a) Calculate the equilibrium price and quantity. Clearly show your steps and manual calculations. (b) Quantify and discuss the impact of imposing a price of $20 per unit on the market, including the full economic price paid by consumers. Clearly show your steps and manual calculations. (c) If government should impose a $8 excise tax on the product, determine the new equilibrium price and quantity. Clearly show your steps and manual calculations. Graphically illustrate your answer. (d) Calculate the amount of tax revenue that government would earn with $8 excise tax. Clearly show your steps and manual calculations. Graphically illustrate and carefully discuss the impact of substantial inflationary expectations on the market equilibrium conditions (equilibrium quantity and price) of automobiles in the United States. Consider the situation presented in Question…
Assume that demand and supply for a product over a period of time, respectively, are: Qdx = 15 - 0.5Px and Qsx = 0.25Px - 3. (a) Calculate the equilibrium price and quantity. Clearly show your steps and manual calculations. (b) Quantify and discuss the impact of imposing a price of $20 per unit on the market, including the full economic price paid by consumers. Clearly show your steps and manual calculations. (c) If government should impose a $8 excise tax on the product, determine the new equilibrium price and quantity. Clearly show your steps and manual calculations. Graphically illustrate your answer. (d) Calculate the amount of tax revenue that government would earn with $8 excise tax. Clearly show your steps and manual calculations.
Assume the following: Price that buyers pay = $22 Price that sellers receive = $25 What must be the value of the tax?
Assume that the demand for coal is more elastic than the supply. A tax on coal will a. increase the price of coal paid by buyers, and sellers bear a smaller burden of the tax b. decrease the price of coal that sellers really get, and sellers have to bear a bigger burden of the tax c. decrease the price of coal paid by buyers, and buyers have to bear a bigger burden of the tax d. increase the price of coal that sellers really get, and buyers bear a smaller burden of the tax
given the following information Qd=240 -5p and Qs= P Where Qd is the quantity demanded and Qs is the quantity supplied and P is the price. suppose the government decided to impose a tax of $12 per unit on the sellers in the market. Determine Demand and supply equation. Recheck consumer surplus calculation. Calculate Tax revenue, deadweight loss and total surplus after tax
Given the following information QD = 240-5p QS = P Where QD is the quantity demanded, Qs is the quantity supplied and P is the price. Calculate: Consumer surplus before tax
Given the following information QD = 240-5p QS = P Where QD is the quantity demanded, Qs is the quantity supplied and P is the price. What is the Equilibrium quantity before tax
Given the following information Q = 240 - 5P Qs =P where is the quantity demanded, Qs is the quantity supplied and P is the price. Suppose that the government decides to impose a tax of 512 per unit on sellers in this market. Determine the buyer's price after tax and seller's price after tax
Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: 1. Buyers would spend a total of $___________ million on soft drinks. 2. Sellers would receive a total of $____________ million (after-tax) from selling soft drinks. 3. The government revenue from this tax would be $____________ million.