The government is considering levying a tax of $80 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DLDL (on the first graph), and the demand for smartphones is shown by DSDS (on the second graph). Suppose the government taxes leather jackets. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S+TaxS+Tax) shifted up by the amount of the proposed tax ($80 per jacket). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. Instead, suppose the government taxes smartphones. 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 ($80 per phone). On the following graph, do for smartphones the same thing you did previously on the graph for leather jackets. Use the green rectangle (triangle symbols) to shade the area that represents tax revenue for smartphones. Then, use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. 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 (smartphone,leather jacket)because, all else held constant, taxing a good with a relatively (less,more) elastic demand generates larger tax revenue and smaller deadweight loss The government is considering levying a tax of $80 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of thesetwo goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DL (on the first graph), and thedemand for smartphones is shown by Ds (on the second graph).Suppose the government taxes leather jackets. The following graph shows the annual supply and demand for this good. It also shows the supply curve(S+Tax) shifted up by the amount of the proposed tax ($80 per jacket).On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use theblack triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax.Leather Jackets Market240S-TaxSupply220200Tax Revenue180180Deadweight Loss1401201008060402050100 150 200 250 300 350 400 450 500 550 600QUANTITY (Jackets)Instead, suppose the government taxes smartphones. The following graph shows the annual supply and demand for this good, as well as the supplycurve shifted up by the amount of the proposed tax ($80 per phone).On the following graph, do for smartphones the same thing you did previously on the graph for leather jackets. Use the green rectangle (trianglesymbols) to shade the area that represents tax revenue for smartphones. Then, use the black triangle (plus symbols) to shade the area thatrepresents the deadweight loss associated with the tax.PRICE (Dollars per jacket) On the following graph, do for smartphones the same thing you did previously on the graph for leather jackets. Use the green rectangle (trianglesymbols) to shade the area that represents tax revenue for smartphones. Then, use the black triangle (plus symbols) to shade the area thatrepresents the deadweight loss associated with the tax.Smartphones Market240220S+TaxSupply200Tax Revenue180160Deadweight Loss140120100806040Ds2050100 150 200 250 300 350 400 450 500 550 600QUANTITY (Phones)Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals.Tax RevenueDeadweight LosIf the Government Taxes..(Dollars)(Dollars)Leather jackets at $80 per jacketSmartphones at $80 per phoneSuppose the government wants to tax the good that will generate more tax revenue at a lower welfare cost. In this case, it should taxbecause, all else held constant, taxing a good with a relativelyelastic demand generates larger tax revenue andsmaller deadweight loss.PRICE (Dollars per phone)

Question

The government is considering levying a tax of $80 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DLDL (on the first graph), and the demand for smartphones is shown by DSDS (on the second graph). Suppose the government taxes leather jackets. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S+TaxS+Tax) shifted up by the amount of the proposed tax ($80 per jacket). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. Instead, suppose the government taxes smartphones. 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 ($80 per phone). On the following graph, do for smartphones the same thing you did previously on the graph for leather jackets. Use the green rectangle (triangle symbols) to shade the area that represents tax revenue for smartphones. Then, use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. 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 (smartphone,leather jacket)because, all else held constant, taxing a good with a relatively (less,more) elastic demand generates larger tax revenue and smaller deadweight loss The government is considering levying a tax of $80 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of thesetwo goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by DL (on the first graph), and thedemand for smartphones is shown by Ds (on the second graph).Suppose the government taxes leather jackets. The following graph shows the annual supply and demand for this good. It also shows the supply curve(S+Tax) shifted up by the amount of the proposed tax ($80 per jacket).On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use theblack triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax.Leather Jackets Market240S-TaxSupply220200Tax Revenue180180Deadweight Loss1401201008060402050100 150 200 250 300 350 400 450 500 550 600QUANTITY (Jackets)Instead, suppose the government taxes smartphones. The following graph shows the annual supply and demand for this good, as well as the supplycurve shifted up by the amount of the proposed tax ($80 per phone).On the following graph, do for smartphones the same thing you did previously on the graph for leather jackets. Use the green rectangle (trianglesymbols) to shade the area that represents tax revenue for smartphones. Then, use the black triangle (plus symbols) to shade the area thatrepresents the deadweight loss associated with the tax.PRICE (Dollars per jacket) On the following graph, do for smartphones the same thing you did previously on the graph for leather jackets. Use the green rectangle (trianglesymbols) to shade the area that represents tax revenue for smartphones. Then, use the black triangle (plus symbols) to shade the area thatrepresents the deadweight loss associated with the tax.Smartphones Market240220S+TaxSupply200Tax Revenue180160Deadweight Loss140120100806040Ds2050100 150 200 250 300 350 400 450 500 550 600QUANTITY (Phones)Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals.Tax RevenueDeadweight LosIf the Government Taxes..(Dollars)(Dollars)Leather jackets at $80 per jacketSmartphones at $80 per phoneSuppose the government wants to tax the good that will generate more tax revenue at a lower welfare cost. In this case, it should taxbecause, all else held constant, taxing a good with a relativelyelastic demand generates larger tax revenue andsmaller deadweight loss.PRICE (Dollars per phone)

Accepted Answer

Tax Revenue from leather jaket = (140-60)x150…