OFDuppose a tax of $4imposed. on atee' equilibrium quontdecreosefrom 2006 units totheunit ispougood, and thhe taxity % the goed toacauses1808 unts$5000 ond$3400.tax decreoses consemer surples bydecruoses paucer, urpeus bythe duod weipentloo0os of tee taxis.a) $5080012002) $16005.e$2200お 3000

A tax is a unilateral payment that the public need to make towards the government for various…

Answered: OF Duppose a tax of $4 imposed. on a…

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter17: Taxation And Resource Allocation

Section: Chapter Questions

Problem 4TY

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Suppose that the government imposes a tax onheating oil.a. Would the deadweight loss from this tax likely begreater in the first year after it is imposed or in thefifth year? Explain.b. Would the revenue collected from this tax likely begreater in the first year after it is imposed or in thefifth year? Explain.
what is market f suppose that if your income is 10000 your tax is 1000 but if your income is 50000 your tax is 4000 such a tax is ANSWR IN DETAIL
Suppose the federal govemment requires beer drink·ers 10 pay a $2 tax on each case of beer purchased. (Infact, both the federal and state governments imposebeer taxes of some sort.}a . Draw a supply-and-demand diagram of the mar·kct for beer without the tax. Show the price paidby consumers, the price n..~cived by producers*and the quantity of beer sold. What is the differ>encc between t~ price paid by consumers and theprice received by producers?b. Now draw a suppl)'•and--dem.and diagram fort~beer market with t~ tax. Show the price paid byconsumers, the price received by producers, andthe quantity olbec.r sold. What is the differencebetween the price paid by consumers and theprice received by producers? Has the quantity olbeer sold incrca.<;ed or decreased?
1. consider public policy aimed at smoking a. studies indicate that the price elasticity of the demandmfor cigarettes is about 0.4. If a packet of cigarette is currently priced at $6 and goverment wants to reduce smoking by 20percent, by how miuch should it increase through levying a tax b. if the government permanently increase the price of cigarette will the policy have a larger effect on smoking one year from now or five years from now. explain c. studies also show that teenagers have a higher price elasticity of demand for cigarette than adults do. why might this be true
f. How would such a tax affect the market for gasoline i.e. what is the newequilibrium?
Table 1Buyer Willingness To PayLori $50.00Audrey $30.00Zach $20.00Calvin $10.002. Refer to Table 1. If the price of the product is $15, then who would be willing to purchase theproduct?a. Lorib. Lori and Audreyc. Lori, Audrey, and Zachd. Lori, Audrey, Zach, and Calvin3. Refer to Table 1. If price of the product is $30, then the total consumer surplus isa. $-10.b. $-6.c. $20.d. $30.
The graph shows befire-tax, where the equilibrium is at 25. When the government levies the tax of 30 on X, price consumer have to pay changes to 35, and prince sellers recieve changes to 5. And at Ps:5, quantity is at 10. What is the consumers’ tax incidence and sellers’ tax incidence, when comaparing the chnage in the prices from before-tax equilibrium price 25??
Suppose that you are an economic-policy advisor. Environmental groups are pressuring you toimplement the highest-possible carbon tax, whileindustry groups are pressuring you to implementno carbon tax at all. Both argue that their positionmakes more sense economically. Explain to themwhat the most-efficient tax level will be, and whythere are costs to setting the tax too high or toolow
Suppose that your state raises its sales taxfrom 5 percent to 6 percent. The state revenuecommissioner forecasts a 20 percent increase insales tax revenue. Is this plausible? Explain.
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1. Complete the following table and identify the quantity that maximizesprofit. Quantity TR MR TC MC 0 0 - 5 - 1 10 2 2 20 15 3 30 10 4 10 37
Daniel Patrick Moynihan, the late senator fromNew York, once introduced a bill that would levy a10,000 percent tax on certain hollow-tipped bullets.a. Do you expect that this tax would raise muchrevenue? Why or why not?b. Even if the tax would raise no revenue, why mightSenator Moynihan have proposed it?

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