Answered: Question 18 When a tax is imposed,… | bartleby

Essentials of Economics (MindTap Course List)

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 1QR

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Question 18
When a tax is imposed, consumer surplus and producer surplus are reallocated to
tax revenue.
tax revenue and deadweight loss.
deadweight loss.
social welfare.
government spending on public services.

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The market for pizza is characterized by a downward sloping demand curve and an upward sloping supply curve. Suppose that the government forces each pizza house to pay a Php2 tax on each pizza sold. Illustrate the effect of this tax on the pizza market. Label the consumer surplus, producer surplus, government revenue, and deadweight loss. How does each area compare to the pre-tax case?
Refer to the figure. What is the Total surplus (consumer surplus + producer surplus + tax revenue) after the tax
QUESTION 1: TAXATION Suppose that the government of China decided to impose a per unit tax on the suppliers of salt. a) Using a supply and demand model, show and explain the impact that the per-unit tax had on the equilibrium price and quantity of salt. b) Using the diagram created for your answer to (a), show and explain what effect the per unit tax had on consumer surplus, producer surplus and deadweight loss. c) List three reasons a government may impose a tax. Discuss the link between government revenue from taxation and elasticity of demand.
Which statement is true? a. None of these is true. b. The cigarette tax is an excise tax. c. The federal personal income tax is a proportional tax. d. The tax on gasoline is a direct tax.
The demand function D(p) = 200 - 4p and supply function is S(p)= 6p1. Find the equilibrium price and quantity2. If government collect $10 unit tax from each product, find the equilibrium demand and supplyprices.3. How much tax revenue is collected?4. What is the deadweight loss amount as a result of taxation?
The market demand is Qd=12 - 0.04P The market supply is Qs=3.8P + 4 Supposed each unit is taxed $0.25: a) calculate the revenue generated by tax b) calculate loss in consumer surplus and the percentage of the burden of the tax paid by consumers. c) calculate loss in producer surplus and the percentage of the burden of the tax paid by producers
Case II: Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: i. The government revenue from this tax would be $___________ million. ii. $___________ million of this revenue would be paid by buyers in the form of higher prices. iii. $____________ million of this revenue would be paid by sellers in the form of reduced income.
Case II: Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: a. The new equilibrium quantity of soft drinks bought and sold would be ___________ million soft drinks. b. The new equilibrium price paid by buyers of soft drinks would be $___________ per liter. c. The new equilibrium price received by sellers (after-tax) would be $___________ per liter.
The demand function D(p) = 200 - 4p and supply function is S(p)= 6p Find the equilibrium price and quantity If government collect $10 unit tax from each product, find the equilibrium demand and supply prices. How much tax revenue is collected? What is the deadweight loss amount as a result of taxation?
Discuss the effects of indirect taxes on producers.
Title The supply and demand equations for a good are respectively. The government decides to impose a tax,... Description The supply and demand equations for a good are Qd=500-9p and Qs=-100+6p respectively. The government decides to impose a tax, t per unit of good. Find the value of t that maximizes the government’s total tax revenue on the assumption that equilibrium conditions prevail in the market. For this level of tax find: a) The equilibrium price, b) The equilibrium quantity, c) The total tax raised.

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