Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is th demand curve before tax, S is the supply curve before tax and Sr is the supply curve after the tax. Price ST 18 12 10 8 7 3 D 10 12 Qua
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- based on the attached equation find:(a) Equilbrium price before the tax(b) Equilbrium quanity before taxSuppose 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.Whichofthefollowingstatementsis(are)correct? (x) A payroll tax is a tax on the wages that a firm pays its workers and in the United States the payroll tax is also referred to as a social insurance tax. (y) The payroll tax differs from the individual income tax in the U.S. because the payroll tax is primarily earmarked to pay for Social Security and Medicare. (z) Taxes on specific goods such as cigarettes, gasoline, alcoholic beverages and tires are called excise taxes. (x), (y) and (z) (x) and (y) only (x) and (z) only (y) and (z) only (x) only
- Mustafa earns 72,000 TRY in a year. Assume that he has 8,000 TRY tax exemption. The following figure shows the marginal tax rates for different income intervals.a) Calculate total tax payments of Mustafa.b) Calculate average tax rate for Mustafa.Suppose the Punjab government requires Coke drinkers to pay a $2 tax on each case of Cokepurchased.a. Draw a supply-and-demand diagram of the market for Coke without thetax. Show the price paid by consumers, the price received by producers,and the quantity of Coke sold. What is the difference between the pricepaid by consumers and the price received by producers?b. Now draw a supply-and-demand diagram for the Coke market with thetax. Show the price paid by consumers, the price received by producers,and the quantity of Coke sold. What is the difference between the pricepaid by consumers and the price received by producers? Has the quantityof Coke sold increased or decreased?Let Q=2P be supply and Q=20-2P be demand. With a tax of 2 the price received by the producer is........ With this question, I know the price received by tge consumer is 6 becuase I just plug the new equilibrium quantity into the demand equation. I reworked all the problems so that P(supply)=1/2Q and P(demand)=10-1/2Q and P(tax)=1/2Q+2. My only question is do I plug the new equilibirum quantity into the supply equaiton with or wihtout the tax? (P=1/2Q or P=1/2Q+2)? I might just be overthinking it, but I just want to double check becuase so I can get a solid understanding of this.
- Q^d= 9.5 - 2p Q^s= 0.6p Tax. Suppose that the government imposes a tax equal to T = 0.50 which buyers must pay for every donut they purchase. (a) How does this tax change the supply and/or demand curve for donuts? (b) Solve for the new equilibrium price and quantity of donuts. Give the price paid by the buyer and the price received by the seller. (c) Draw a single supply and demand diagram that compares the equilibrium with and without the tax. Be sure to indicate the equilibrium quantity of donuts sold as well as the price paid by buyers and the price received by sellers in each case. On the same diagram, indicate the areas which represent consumer and producer surplus, tax revenue and the deadweight loss arising from this tax. (d) Calculate the amount of producer and consumer surplus at this new equilibrium price and quantity, as well as the amount of tax revenue and the deadweight loss. (e) Is the total surplus higher, lower, or the same as in question one? Give an…Tax revenue when tax is $80 Tax revenue when tax is $40 Tax revenue when tax is $120 The graph shows the demand and supply of bungee jumps in Xtremeland. The government decides to impose an excise tax on bungee jumps to help pay for the high number of back and neck injuries.A challenger presidential candidate vows to cutentitlement spending by 20 percent in the first fewweeks that he is in office. Why is it unlikely thecandidate could achieve this reduction?
- 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?Identify the effect of increase in tax rates on either demand or supply curve and the equilibruim interst rates.If the government imposes a unit sales tax (i.e., $ tax per unit sold) on a product, which one, “demand or supply” will shift? Increase or decrease? Will the new tax cause “disequilibrium”? Please state clearly about the shift (leftward or rightward) and the equilibrium price and quantity change. No graph is required.