the drop down options are jeans and allergy medication Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals.Tax RevenueDeadweight LossIf the Government Taxes...(Dollars)(Dollars)Jeans at $25 per pairAllergy medication at $25 per bottleIf the government wants to impose the tax that is more efficient, it should tax(Hint: Assume the administrative burdensof the two tax laws are equal.) The government is considering levying a tax of $25 per unit on suppliers of either jeans or allergy medication. The supply curve for each of these twogoods is identical, as you can see on each of the following graphs. The demand for jeans is shown by DJ (on the first graph), and the demand forallergy medication is shown by DA (on the second graph).Suppose the government taxes jeans. 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 ($25 per pair).On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for jeans. Then use the blacktriangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax.Jeans Market6055Supply50Tax Revenue45S+Tax40Deadweight Loss353025201510550100 150 200 250 300 350 400 450 500 550 600QUANTITY (Pairs)Instead, suppose the government taxes allergy medication. The following graph shows the annual supply and demand for this good, as well as thesupply curve shifted up by the amount of the proposed tax ($25 per bottle).On the following graph, do the same thing that you did on the graph for jeans. Use the green rectangle (triangle symbols) to shade the area thatrepresents tax revenue for allergy medication. Then, use the black triangle (plus symbols) to shade the area that represents the deadweight lossassociated with the tax.Allergy Medication Market6055Supply50Tax Revenue45S+Tax40Deadweight Loss3515105DA50100 150 200 250 300 350 400 450 500 550 600QUANTITY (Bottles)PRICE (Dollars per bottle)PRICE (Dollars per pair)

Total revenue is the total receipts from sales of a given quantity of products or services. It is…

omplete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. Tax Revenue Deadweight Loss If the Government Taxes... (Dollars) (Dollars) Jeans at $25 per pair Allergy medication at $25 per bottle the government wants to impose the tax that is more efficient, it should tax (Hint: Assume the administrative burdens f the two tax laws are equal.)

omplete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. Tax Revenue Deadweight Loss If the Government Taxes... (Dollars) (Dollars) Jeans at $25 per pair Allergy medication at $25 per bottle the government wants to impose the tax that is more efficient, it should tax (Hint: Assume the administrative burdens f the two tax laws are equal.)

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 6PA

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