A Tax of $5.00 is levied on the buyer of the item below. P 10 7.5 5 2.5 --- Supply Demand 200 400 600 800 Q 1. The equilibrium price before the tax. $ 2. The price that buyers effectively pay after the tax. $ 3. The price that sellers effectively receive after the tax. $ 4. The incidence of the tax on buyers is. $ 5. The incidence of the tax on sellers is. $ 6. Deadweight Loss of the Tax (calculated as the area of loss) Area of a triangle (Base x Height)

A Tax of $5.00 is levied on the buyer of the item below. P 10 7.5 5 2.5 --- Supply Demand 200 400 600 800 Q 1. The equilibrium price before the tax. $ 2. The price that buyers effectively pay after the tax. $ 3. The price that sellers effectively receive after the tax. $ 4. The incidence of the tax on buyers is. $ 5. The incidence of the tax on sellers is. $ 6. Deadweight Loss of the Tax (calculated as the area of loss) Area of a triangle (Base x Height)

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 10PA

See similar textbooks

Similar questions

The government of a State has been experiencing an increase in number of obesity cases. Research suggests an increase in consumption of a particular fast food item is responsible for high number of obesity cases. As a result, the government of that State is considering an imposition of $1 tax. Monthly demand and supply for this good are QD=21-1P and QS= -1+1P respectively. Draw the demand and Supply curve for fast food before the tax is imposed. Calculate the equilibrium price and quantity, consumer and producer surplus, and label them on the graph. Calculate the price elasticity of demand and supply for fast food. If the State government imposes a tax, who will bear the most of the burden of the tax? Suppose that the State government finally imposes a $1 tax on fast food. What will the new equilibrium price and quantity? Include the tax on your graph. Calculate the consumer and producer surplus and label them on the graph. Is there any deadweight loss resulting from the tax on that…
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
Discuss the effects of indirect taxes on producers.
Given the following information QD = 240 - 5P QS = p where QD is the quantity demand, QS is the quantity supplied and P is the price. suppose the government decides to impose a tax of $12 per unit on sellers in the market. Determine specifically; The buyer's price after tax? The seller's price after tax? Quantity after tax?