Consider the market for gasoline illustrated in the figure to the right. Suppose the market is perfectly competitive and initially in equilibrium. Now suppose the government imposes a gasoline tax of $1.50 to be paid for by producers. The effect of this tax is illustrated in the figure to the right. Who bears the burden of the tax? Consumers pay $ of the $1.50 tax (enter a numeric response using a real number rounded to two decimal places) and producers pay $ ☐ of th Question Viewer 7.00- 6.50- 6.00- 5.50- 5.00- 4.50- 4.00- 3.50- 3.00- 2.50- 2.00- Price of gasoline (dollars per gallon) 1.50- 1.00- 0.50- 0.00 -0 10 -20 D -80 30 40 50 60 70 80 Quantity of gasoline 90
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- Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? pls draw a diagramThe market demand for productXis given by: \[ Q_{d}=6-1 / 2 P \text { or } P d=12-2 Q \] The market supply for goodXis given by: \[ Q_{s}=-14+2 P \text { or } P s=7+1 / 2 Q \] whereP=price per unit andQis number of units. Draw a supply-and-demand graph with these curves. 1.) Using the line drawing tool, draw the supply and demand curves. Properly label your lines. 2.) Using the point drawing tool, plot the equilibrium point. Label your point 'E'. Note: Carefully follow the instructions above and only draw the required objects. The equilibrium price is$and the equilibrium quantity is unit(s). (Enter your responses as integers.) A per-unit excise tax is imposed on suppliers of productX, and the market supply with the tax is now given by: \[ Q_{s}=-19+2 P \text { or } P s=9.50+1 / 2 Q \] Using the graph on the right, show this supply curve. 1.) Using the line drawing tool, draw the new supply curve. Label your line 'S1+tax'.1. Note: Carefully follow the instructions above and only draw…The annual demand for imported oranges is given by the following equation:?? = 600,000 − 30,000?where ? is the price per kilogram and ?? is quantity of kilograms demanded per year.The supply of imported oranges is given by the equation:?? = 20,000? b. Suppose that a $1-per-gallon tax is levied on the price of oranges received by sellers. Use both graphic and algebraic techniques to show the impact of the tax on market equilibrium.
- Sinead commutes from her suburban residence to the city center. When asked her opinion of a proposed congestion tax of $5 per trip, she says, “Of course I oppose the congestion tax. It would make me worse off by $5 per trip. What do you think I am, stupid?” Critically appraise Sinead’s statement.Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? pls explain by drawing a diagramSay in a market we haveDemand is P = 5 – 0.005QSupply is P = 0.00125Qa-you will have a graph with price on the vertical axis and quantity on the horizontal axis formost parts of this problem. You will want to show intercept values and equilibrium values withthe specific values from the problem (when you graph the supply show it go out at least to thesame level of Q as the Q intercept for the demand curve).b-what are the equilibrium price and quantity traded in the market?c-say the government levies an excise tax in the market of 50 cents that renders the supply tonow be P = .00125Q + 0.5 (essentially the supply curve shifts up by 50 cents at each quantity).What are the new equilibrium price and quantity traded in the market with this excise tax?d-did the market price increase by as much as the 50 cent tax? (compare the market priceincrease with the amount of the tax of 50 cents)e-what is then loss in consumer surplus from the tax? Do consumers like excise taxes?f-what is the elasticity…
- Although 23 states barred the sale of self-service gasoline in 1968, most removed the bans by themid 1970s. By 1992, self-service outlets sold nearly 80% of all US gas, and only New Jersey andOregon continued to ban self-service sales. Using predicted values for self-service sales for NewJersey and Oregon, Johnson and Romeo (2000) estimated that the ban in those two states raisedthe price of gasoline by somewhere between 3¢ and 5¢ per gallon. Why did the ban affect theprice? Illustrate using a figure and explain. Show the welfare effects in your figure.Don't use chatgpt and make sure you include the graphs needed (a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay?(b) Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? (c) If you were a policymaker and wanted to promote a fat tax in the UK, whatwould you cover in your policy campaign?In 2018, a cold front in Barbados increased both the demand for water heaters andgasolines. The usage of gasoline was 581 tonnes, an increase from 499 tonnes in theprevious year. The Petroleum Company of Barbados advised Government officials thatdemand could outweigh supply and asked companies to increase the supply. They alsoasked major gasoline users, such as power plants, to reduce demand. Illustrate the effect of the cold front on the demand for gasoline using a demandcurve diagram over the two years.
- If you’ve ever travelled to another country, such asGermany, you may have noticed that the price on aproduct is the total amount you actually pay when youcheck out. That is, no sales tax is added to the purchaseprice at the checkout as it is in the United States. That isbecause many countries impose a value added tax (VAT).In a small group, research value added taxes and debate whether or not such taxes benefit consumers. Do mar-keters support or dislike these types of taxes?Sinead commutes from her suburban residence to the city centre. When asked her opinion of a proposed congestion tax of $5 per trip, she says, “Of course I oppose the congestion tax. It would make me worse off by $5 per trip. What do you think I am, stupid?” Critically appraise Sinead’s statement.Under which circumstances does line tax burden fall entirely on consumers?