Question 6 The September 28, 2021 edition of the Wall Street Journal contained an article titled "Democrats Plan to Tax the Poor" (written by Tom Giovanetti; there is no need for you to review the article). The article stated that the plan would double the federal excise tax on cigarettes from $1 to $2 per pack. Some say this is a version of the so-called "sin tax" which involves using taxes to discourage certain behaviors. Others think it is aimed at more revenue generation. • Using a graph with quantity on the horizontal axis and price on the vertical axis, show the equilibrium P and Q (labeling it Po and Qo) prior to

Question

i need in words 

not handwritten solution

raising the excise tax by $1. You should assume Demand is downward
sloping and Supply is upward sloping.
Now add the impact of the increase in cigarette excise taxes of $1.00.
Clearly show with an arrow (keeping in mind that the direction of the shift
for depicting both taxes and subsidies carries a special meaning in
economics) and explain any shifts in demand and/or supply curves. Label
any shifted curves as D, and/or S. If the curves have not shifted, please
explain why. Graphically depict the new equilibrium price and quantity
(labeling it Pa and Q.).
At the new equilibrium, please determine how much of the excise tax
increase was borne by cigarette consumers and how much was absorbed
by cigarette firms. Indicate the incidence of taxation for both consumers
and producers as shown on your graph and explain, defining the concept
and comparing the two.
If demand for cigarettes tends to be relatively price-inelastic (steep) and
supply of cigarettes tends to be relatively price elastic (flatter), who will
bear higher burden of taxation: consumers or producers or will they bear
the burden equally? Why? You may want to illustrate your response with
another graph, especially if the graph that you've previously drawn does
not reflect these specific shapes of demand and supply curves.
Expand
Transcribed Image Text

raising the excise tax by $1. You should assume Demand is downward sloping and Supply is upward sloping. Now add the impact of the increase in cigarette excise taxes of $1.00. Clearly show with an arrow (keeping in mind that the direction of the shift for depicting both taxes and subsidies carries a special meaning in economics) and explain any shifts in demand and/or supply curves. Label any shifted curves as D, and/or S. If the curves have not shifted, please explain why. Graphically depict the new equilibrium price and quantity (labeling it Pa and Q.). At the new equilibrium, please determine how much of the excise tax increase was borne by cigarette consumers and how much was absorbed by cigarette firms. Indicate the incidence of taxation for both consumers and producers as shown on your graph and explain, defining the concept and comparing the two. If demand for cigarettes tends to be relatively price-inelastic (steep) and supply of cigarettes tends to be relatively price elastic (flatter), who will bear higher burden of taxation: consumers or producers or will they bear the burden equally? Why? You may want to illustrate your response with another graph, especially if the graph that you've previously drawn does not reflect these specific shapes of demand and supply curves.

Question 6
The September 28, 2021 edition of the Wall Street Journal contained an article titled
"Democrats Plan to Tax the Poor" (written by Tom Giovanetti; there is no need for you
to review the article). The article stated that the plan would double the federal excise tax
on cigarettes from $1 to $2 per pack. Some say this is a version of the so-called "sin tax"
which involves using taxes to discourage certain behaviors. Others think it is aimed at
more revenue generation.
• Using a graph with quantity on the horizontal axis and price on the
vertical axis, show the equilibrium P and Q (labeling it Po and Qo) prior to
raising the excise tax by $1. You should assume Demand is downward
sloping and Supply is upward sloping.
Now add the impact of the increase in cigarette excise taxes of $1.00
Expand
Transcribed Image Text

Question 6 The September 28, 2021 edition of the Wall Street Journal contained an article titled "Democrats Plan to Tax the Poor" (written by Tom Giovanetti; there is no need for you to review the article). The article stated that the plan would double the federal excise tax on cigarettes from $1 to $2 per pack. Some say this is a version of the so-called "sin tax" which involves using taxes to discourage certain behaviors. Others think it is aimed at more revenue generation. • Using a graph with quantity on the horizontal axis and price on the vertical axis, show the equilibrium P and Q (labeling it Po and Qo) prior to raising the excise tax by $1. You should assume Demand is downward sloping and Supply is upward sloping. Now add the impact of the increase in cigarette excise taxes of $1.00

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Economics

Microeconomics

Related Economics Q&A

Find answers to questions asked by students like you.

Q: Precision Dental Lab provides a 8% trade discount when offering lab services of $1,000 or more to it...

A: Trade discount = Sales x trade discount rate = $2700*8% = $216

Q: A car dealership wants to try out a new leasing arrangement, which will allow a buyer to trade a car...

A: Click to see the answer

Q: Not only is blood agar an enriched medium that can support fastidious organism growth, but it can al...

A: Blood agar is an enriched, differential growth medium for fastidious organisms like streptococci. Bl...

Q: A space traveller weighs herself on Earth at a location where the acceleration due to gravity is 9.8...

A: Given data:  Acceleration due to gravity on earth g = 9.81 m/s2 Weight on earth (w) = 521 N

Q: New Tax Accounting Clients. New legislation passed in 2017 by the U.S. Congress changed tax laws tha...

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a...

Q: a. A researcher interested in the texting habits of high school students in the United States. The r...

A: The population is the whole or total set of observations that can be made, and the sample is the sub...

Q: Two spacecraft are following paths in space given by r = (sin(t), t, t) and r2 = (cos(t), 1- t,1). I...

A: Click to see the answer

Q: If 30% of the nucleotides in a single-stranded RNA molecule are adenine, then what percent are expec...

A: In DNA's nucleic acid, thymine is one of the four nucleobases.

Q: While traveling to Europe, Phelan exchanged 250 US dollars for euros. He spent 150 euros on his trip...

A: Given  Total US dollars Phelan has 250. Euros spent by Phelan on his trip = 150 

Q: Which type of model best represents crystals A:space-fill B:Lewis dot C:ball-and -stick D:ribbon

A: We are to discuss which type of model best represents crystals  from the given options. Space fill L...

Q: Married at 25. A study suggests that the 25% of 25 year old’s have gotten married. You believe that ...

A: Solution  Given that  The sample size of 25 year old in census data n=776 Null Hypothesis H0 : p^=0....

Q: Direct Request: Planning a Winter Retreat in Vail, Colorado.Your employer, Pointer Media Group of Co...

A: An email service provider (ESP) is an organization that gives email promotion services. All the more...

Q: Each year, students in an elementary school take a standardized math test at the end of the school y...

A: Click to see the answer

Q: For the past several years, Samantha Hogan has operated a part-time consulting business from her hom...

A: The question is based on the concept of business accounting. As per the Bartleby guidelines we are a...

Q: 3.24-gram sample of NaHCO3 was completely decomposed in an experiment. 2NaHCO3 → Na2CO3 + H2CO3 In...

A: NaHCO3 is Sodium bicarbonate and it is also known as  as baking soda or bicarbonate of soda.  It is ...

Q: 1. Write the chemical formula for magnesium hydrogen sulfite. 2. Write the chemical formula for man...

A: Answer:- This question is answered by using the simple concept of writing the chemical name and form...

Q: Emails Received. According to a 2017 survey conducted by the technology market research firm The Rad...

A: Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a...

Q: Drag each phrase to show whether it describes primary succession or secondary succession occurs on b...

A: Primary succession-  Where there has never been an ecosystem, primary succession occurs. Because it ...

Q: The most dangerous particles in polluted air are those with diameters less than 2.5 μm because they ...

A: Stoke's velocity is given by:

Q: 20. Amy drove to a friend's house at a rate of 45 mph. She returned by the same route at a rate of 5...

A: Topic- basic maths 

Q: CHALLENGE ACTIVITY 6.1.1: Basic function call   get_pattern() returns 5 characters. Call get_pattern...

A: According to the Question below the Solution:     Output:

Q: Testing the patellar reflex in a patient is a good indicator of overall brain function. True or fals...

A: A spontaneous automatic involuntary response to a stimulus which occurs without any conscious effort...

Q: 5.23 LAB: Adjust values in a list by normalizing   When analyzing data sets, such as data for human ...

A: Answer :-

Q: Sucrose (C₁₂H₂₂O₁₁) is combusted in air according to the following reaction: C₁₂H₂₂O₁₁(s) + O₂(g) → ...

A: Given - Un - Balanced Chemical equation is -  C₁₂H₂₂O₁₁(s) + O₂(g) → CO₂(g) + H₂O(l)    The balanced...

Q: Read the following excerpt from a 1775 speech by Patrick Henry in which he presents his ideas concer...

A: Patrick Henry (Born on May 29, 1736 – Died on June 6, 1799) was an American attorney, planter, polit...

Q: Draw the structures and assign formal charges, if applicable, to these structures. BH3 and BH4 Dra...

A: Click to see the answer

Q: A star is estimated to have a mass of 2 x 1036 kg. Assuming it to be a sphere of average radius 7.0 ...

A: Given:m = 3 x 10³⁶ kg, the mass of the starr = 7.6 x 10⁵ km = 7.6 x 10⁸ mCalculate the volume of the...

Q: A student use solution of potassium hydroxide to titrate a solution of nitric acid. Which question i...

A: Titration is generally used to calculate concentration of the unknown solution. Here the student is ...

Q: Consider the flask apparatus in Exercise 85, which now contains 2.00 L H2 at a pressure of 360. torr...

A: Click to see the answer

Q: What is the percent yield when a reaction vessel that initially contains 67.5 kg CH4 and excess stea...

A: Click to see the answer

Q: The microbes discovered in Lake Whillans and Pitch Lake represented a few of the general categories ...

A: Pathogenic organisms are of five main types: viruses, bacteria, fungi, protozoa, and worms or Helmin...

Q: 3. From past experience, Anna knows that the probability that her friend will take her to dinner in ...

A: Subtract 0.9 from 1 to obtain the probability. Probability=1-0.9=0.1

Q: 12. Mineral oil is not as good as water at dissolving salts. Do we think the bonds in mineral oil ar...

A: Polar bonds are the covalent bond where the electron density between two atoms is unequally shared. ...

Q: How can you create a document to substantiate a mileage deduction? Mileage > Download trips Expenses...

A:  

Q: Transactions and T accountsThe following selected transactions were completed during July of the cur...

A: Recording of journal entries, posting of recorded transactions into ledger accounts and then prepara...

Q: Which of the following is facilitating a more moderate Texas political culture? O The political acti...

A: The growth of the agricultural industry.

Q: During 2021, José, a self-employed technology consultant, made gifts in the following amounts: To H...

A: Gifts made to customers are deductible up to $25 per each

Q: Which description accurately represents a water molecule?(1 point) A:slightly negative oxygen pole...

A: Click to see the answer

Q: Morty is supposed to meet up with Rick, who is 50 mi north and 100 mi east of Morty,after exploring ...

A: Click to see the answer

Q: Scenario You work for a small company that creates text-based games. You have been asked to pitch an...

A: Given: You work for a small company that creates text-based games. You have been asked to pitch an i...

Q: Determine which base will work to deprotonate each compound in an acid/base extraction. Choose... OH...

A: Click to see the answer

Q: Identify what is wrong. The software package StatCrunch coordinated a "Future Optimism Survey" that ...

A: We have a sample and we have to give type of sample.

Q: In 2019, Simon, age 12, has interest income of $4,900 and no earned income. He has no investment exp...

A: Unearned Income & Tax liability for Children Here total unearned income = $ 4900 and has no earn...

Q: The estimated distribution (in millions) of the population by age in a certain country for the year ...

A: Click to see the answer

Q: Assignment4A: Let's Play Bunco! Now that we are able to repeat actions easily with loops, we can pro...

A: the code is given below:

Q: Shawn (m = 45.0 kg) rides his skateboard at a local skate park. He starts from rest at the top of th...

A: Click to see the answer

Q: Bonnie is making a dipping sauce. She mixes 150 milliliters of soy sauce with 100 milliliters of vin...

A: given : She mixes 150 millilitres of soy sauce with 100 millilitres of vinegar.

Q: 1. Engagement Activity: Frequency Distributions Once researchers have collected data for their resea...

A: Here in the graph accuracy is given when shown on the left and right for non words and words. Here w...

Q: Which of the following pathways indicate how nitrogen is added to the largest nitrogen reservoir? Ni...

A: Earth science is the study of the Earth and the various processes that are going on in the earth sys...

Q: A bicycle pedal is pushed by a foot with a 60-N force as shown . The shaft of the pedal is 18 cm lon...

A: Given: A bicycle pedal is pushed by a foot with a 60-N force as shown . The shaft of the pedal is 18...