Given an inverse demand equation of P = 50 - 0.5Q and an inverse supply equation of P = 0.333Q, a. Graph and Solve the Deadweight Loss and Tax Revenue when tax is increased to 30 (inverse supply equation: P = 0.333Q + t) b. Graph and Solve the Deadweight Loss and Tax Revenue when tax is increased to 40

Given an inverse demand equation of P = 50 - 0.5Q and an inverse supply equation of P = 0.333Q, a. Graph and Solve the Deadweight Loss and Tax Revenue when tax is increased to 30 (inverse supply equation: P = 0.333Q + t) b. Graph and Solve the Deadweight Loss and Tax Revenue when tax is increased to 40

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 25SQ

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2. Use the graph and the inverse demand equation (P=50 - .5Q), inverse supply equation (P=0.333Q) and the inverse supply equation with tax (P=0.333Q + t). a. Solve for the DWL and tax revenue when the tax is increased to t=30 b. Solve for the DWL and tax revenue when the tax is increased to t=40 c. Explain what happens to DWL and tax revenue as tax size increases from 10, to 30 to 40. 3. Note: Show solutions and round off answers to whole numbers.
Assume that the demand for food is relatively inelastic and the demand for jewelry is relatively elastic. Which of the following statement(s) is correct? (x) Suppose government imposed the same excise tax on both goods. The tax revenue from the tax on jewelry will always be more than the tax revenue from the tax on food. (y) Suppose government imposed the same excise tax on both goods. The deadweight loss from imposing a tax on food would be more than the deadweight loss from imposing a tax on jewelry. (z) If the size of a tax decreases for either good, then the deadweight loss decreases for that good. (x), (y) and (z) (x) and (y) only (x) and (z) only (y) and (z) only (z) only
The table below illustrates the market for Internet services. Use a demand-supply graph to answer the following. Draw a graph of the market for internet services before the tax (only plot the supply and demand functions). Suppose the government imposes a $15 tax per month on the supply side of the market. Sketch the new supply function after the tax.
The linear demand curve is: Q = 100 - 4P The linear supply curve is: QS = -20 + 2P For each of the following questions, you need to show the basic calculation steps. 1) Given the above market demand and supply curves for the bottled wine in a hypothetical economy, please calculate the market equilibrium price and market equilibrium quantity for a bottle of wine. 2) If the government decides to charge an excise tax at the rate of 3 for each bottle of wine, what is the tax burden on consumers? And what is the tax burden on the firms? Show your calculation steps. B) Who shares more of the tax burden, the consumer or the firms? Please explain the reasons behind it.
PLEASE ANSWER THE GRAPHS AS WELL AS THE BOLDED QUESTIONS AND TABLES. The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by DCDC (on the first graph), and the demand for bus passes is shown by DBDB (on the second graph). Suppose the government taxes concert tickets. 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 ($60 per ticket). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for concert tickets. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. FIRST PICTURE GOES HERE On the following graph, do the same thing that you did…
Which of the following statements about dead weight loss is false: A)If supply is price elastic, increasing the tax will increase DWL B)If demand is price elastic, increasing the tax will increase DWL C)Increasing taxes will cause DWL to increase at a decreasing rate D)DWL will increase as the size of a market increases, all else held constant E)More than one of the statements above is false ( Give proper explanation )
Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay Price Sellers Receive (Bottles of wine) (Dollars per bottle) (Dollars per bottle) Before Tax After Tax Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden Elasticity (Dollars per bottle) Buyers Sellers The burden of the tax falls more heavily on the __elastic side of the market.
If a 10 cent tax is imposed on a supply curve with the function Qs = P - 2, the function representing the Qs + Tax line would be Select one: a. Qs+Tax = 2P - 9 b. Qs+Tax = P - 2.10 c. Qs+Tax = 2P - 7 d. Qs+Tax = P - 1.90
Suppose that a market is described by the following supply and demand equations:Qs=2PQD=300-Pa.Solve for the equilibrium price and the equilibrium quantity.b.Solve that a tax of T is placed on buyers,so the new denad equation is QD=300-(P+T).Solve for the new equilibrium.What happens to the price receive by sellers,the price paid by buyers.and the quantity sold?c.Tax revenue is TxQ.Use your answer from part(b)to solve for tax revenue as a function of T.Graph this relationship for T between 0 and 300.d.The dead weight loss of a tax is the area of a triangle between supply and demand curves.Recalling that the area of the triangle is 1/2xbasexheight,solve for the dead weight loss as afunction of T.Graph this relationship for T between 0 and 300.e.The government now levies a tax of $200per unit on this good.Is this a good policy?Why or why not?Can you propose a better policy?
Suppose that a tax is placed on a particular good. If the consumers pay a higher share of the tax, this indicates that the Group of answer choices government has required that buyers remit the tax payments. government has required that buyers remit the tax payments. supply is more inelastic than the demand. demand is more inelastic than the supply.
The government is considering levying a tax of $120 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 ($120 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…
Relationship between tax revenues, deadweight loss, and demand elasticity The government is considering levying a tax of $120/unit 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 DL (on the first graph), and the demand 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 ($120 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.