Assume that the market for a good is in equilibrium at a price of $20 and a quantity of 100 units. After the government imposes a $5 per-unit excise tax on the good, the price that buyers pay for the good increases by $3. Which of the following are possible values for the government tax revenue and deadweight oss in the market? * O Tax revenue is $200, deadweight loss $0

Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand, And Government Policies
Section: Chapter Questions
Problem 4PA
icon
Related questions
Question
Assume that the market for a good is in equilibrium at a price of $20 and a
quantity of 100 units. After the government imposes a $5 per-unit excise tax on
the good, the price that buyers pay for the good increases by $3. Which of the
following are possible values for the government tax revenue and deadweight
loss in the market? *
O Tax revenue is $200, deadweight loss $0
O Tax revenue is $300, deadweight loss $O
Tax revenue is $300, deadweight loss $100
Tax revenue is $500, deadweight loss $200
O Tax revenue is $500, deadweight loss $300
Assume that hot dogs and mustard are complementary goods. If the price of hot
dogs increase, what will happen to the price and quantity sold of mustard?
Price will increase and quantity sold will increase.
Price will increase and quantity sold will decrease.
Price will decrease and quantity sold will decrease.
Price will decrease and quantity sold will increase.
O None of the above.
Transcribed Image Text:Assume that the market for a good is in equilibrium at a price of $20 and a quantity of 100 units. After the government imposes a $5 per-unit excise tax on the good, the price that buyers pay for the good increases by $3. Which of the following are possible values for the government tax revenue and deadweight loss in the market? * O Tax revenue is $200, deadweight loss $0 O Tax revenue is $300, deadweight loss $O Tax revenue is $300, deadweight loss $100 Tax revenue is $500, deadweight loss $200 O Tax revenue is $500, deadweight loss $300 Assume that hot dogs and mustard are complementary goods. If the price of hot dogs increase, what will happen to the price and quantity sold of mustard? Price will increase and quantity sold will increase. Price will increase and quantity sold will decrease. Price will decrease and quantity sold will decrease. Price will decrease and quantity sold will increase. O None of the above.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Recommended textbooks for you
Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781305971509
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Macroeconomics (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Economics
ISBN:
9781285165912
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning