Pearson eText Microeconomics -- Access Card
7th Edition
ISBN: 9780136850045
Author: Hubbard, Glenn, O'Brien, Anthony
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 5.3.10PA
To determine
The impact of tax of gasoline on the supply of gasoline.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
This is one question. Thank you for helping me understand the material.
The government is considering levying a tax of $100 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these
two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by D (on the first graph), and the
demand for smartphones is shown by Ds (on the second graph)
Suppose the government taxes leather jackets. 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 ($100 per jacket).
On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use the
black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax.
?
Leather Jackets Market
240
Supply
220
200
S+Tax
Tax Revenue
180
160
Deadweight Loss
140
120
100
DL
40
20
0
0
50 100
150 200 250 300 350 400 450 500 550 600
QUANTITY…
Use the following graph to answer the question: how much is producer surplus?
What is the total value to consumers of consuming the first ten units of this good?
Chapter 5 Solutions
Pearson eText Microeconomics -- Access Card
Ch. 5 - Prob. 5.1.1RQCh. 5 - Prob. 5.1.2RQCh. 5 - Prob. 5.1.3RQCh. 5 - Prob. 5.1.4RQCh. 5 - Prob. 5.1.5RQCh. 5 - Prob. 5.1.6PACh. 5 - Prob. 5.1.7PACh. 5 - Prob. 5.1.8PACh. 5 - Prob. 5.1.9PACh. 5 - Prob. 5.1.10PA
Ch. 5 - Prob. 5.1.11PACh. 5 - Prob. 5.1.12PACh. 5 - Prob. 5.1.13PACh. 5 - Prob. 5.2.1RQCh. 5 - Prob. 5.2.2RQCh. 5 - Prob. 5.2.3RQCh. 5 - Prob. 5.2.4PACh. 5 - Prob. 5.2.5PACh. 5 - Prob. 5.2.6PACh. 5 - Prob. 5.2.7PACh. 5 - Prob. 5.2.8PACh. 5 - Prob. 5.2.9PACh. 5 - Prob. 5.2.10PACh. 5 - Prob. 5.2.11PACh. 5 - Prob. 5.3.1RQCh. 5 - Prob. 5.3.2RQCh. 5 - Prob. 5.3.3RQCh. 5 - Prob. 5.3.4PACh. 5 - Prob. 5.3.5PACh. 5 - Prob. 5.3.6PACh. 5 - Prob. 5.3.7PACh. 5 - Prob. 5.3.8PACh. 5 - Prob. 5.3.9PACh. 5 - Prob. 5.3.10PACh. 5 - Prob. 5.3.11PACh. 5 - Prob. 5.3.12PACh. 5 - Prob. 5.3.13PACh. 5 - Prob. 5.3.14PACh. 5 - Prob. 5.3.15PACh. 5 - Prob. 5.3.16PACh. 5 - Prob. 5.4.1RQCh. 5 - Prob. 5.4.2RQCh. 5 - Prob. 5.4.3RQCh. 5 - Prob. 5.4.4PACh. 5 - Prob. 5.4.5PACh. 5 - Prob. 5.4.6PACh. 5 - Prob. 5.4.7PACh. 5 - Prob. 5.4.8PACh. 5 - Prob. 5.4.9PACh. 5 - Prob. 5.4.10PACh. 5 - Prob. 5.4.11PACh. 5 - Prob. 5.4.12PACh. 5 - Prob. 5.1CTECh. 5 - Prob. 5.2CTE
Knowledge Booster
Similar questions
- The government is considering levying a tax of $120 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by D, (on the first graph), and the demand for smartphones is shown by Ds (on the second graph). Suppose the government taxes leather jackets. 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 ($120 per jacket). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. Ⓡ Leather Jackets Market 240 S+Tax Tax Revenue 200 180 160 Deadweight Loss D₁ Instead, suppose the government taxes smartphones. The following graph shows the…arrow_forwardthe drop down options are jeans and allergy medicationarrow_forwardSuppose government impose a tax of 1 dollar per bottle on sellers of industrial detergent. Explain 3 dimensions in which you can explain the effect of this tax.arrow_forward
- Suppose the government imposes an excise tax on mountain bikes. The black line on the following graph shows the tax wedge created by a tax of $40 per bike. First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax, Finally, use the black point (plus symbol) to shade the area representing deadweight loss. After Tax 200 100 160 Tax Revenue Demand 140 120 Consumer Surplus 100 Tax Wedge Supply Producer Surplus 40 Deadweight Loss 20 60 100 150 200 210 300 0 400 40 s00 QUANTITY (Ues) ( ad a soearrow_forwardThe accompanying graph depicts a hypothetical market for salt. Suppose that an excise or commodity tax is levied on consumers in an attempt to curb blood pressure problems. Show the effect of the tax by shifting the appropriate curve(s). Macmillan Learning Who has the larger tax burden? Consumers (buyers) Producers (suppliers) The tax burdens are equal Why is the tax burden as you described in in the question above? Consumers are the ones paying the tax. Demand is less elastic than supply. Both supply and demand are perfectly elastic. Supply is less elastic than demand. Demand is more elastic than supply. Price (S/kilogram) 9 3 Market for Salt D 4 5 Quantity (in kilograms). S 10arrow_forwardWith the help of appropriate diagrams, explain how a tax can be used to reduce the consumption of a harmful product such as cigarettes.arrow_forward
- Suppose that the government imposes a per-unit tax on cell phones. The tax is imposed on producers of cell phones and the amount of the tax is $50 per cell phone. The following graph shows the effect of the tax. Use the graph to answer the following questions. a) What is the equilibrium P* and Q* before the imposition of the tax? b) How many cell phones per year are sold after the tax has been imposed? What price per cell phone do consumers pay after the tax has been imposed? c) What price do producers receive per cell phone after the tax is paid?arrow_forwardNote: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per pack) 10 9 8 7 2 1 0 Supply Demand 0 10 20 30 40 50 60 70 80 90 100 QUANTITY (Packs) Suppose the government imposes a $2-per-pack tax on suppliers. At this tax amount, the equilibrium quantity of cigarettes is Graph Input Tool Market for Cigarettes Quantity (Packs) Demand Price (Dollars per pack) Tax (Dollars per pack) 40 6.00 2.00 Supply Price (Dollars per pack) packs, and the government collects $ ? 4.00 in tax revenue.arrow_forwardRead the following excerpt: 'In the UK, fuel duty is levied per unit of fuel purchased and is included in the price paid for petrol, diesel and other fuels used in vehicles or for heating. The rate depends on the type of fuel: the headline rate on standard petrol and diesel has been reduced from 57.95 pence to 52.95 pence per litre.' Suppose that, in order to reduce greenhouse gas emissions, the UK government is considering raising fuel duty on standard petrol and diesel. Suppose that the government intends to earmark the additional fuel tax revenue, not for subsidising less carbon-intensive energy production (e.g., wind energy) but for supporting higher education (e.g., reduction in university fees). Are there additional theoretical implications in terms of efficiency in resource allocation, due to the intended use of the revenue? Explain.arrow_forward
- In the market for candy, researchers have estimated the following demand and supply curves. Demand: P= 8 - Q/100 Supply: P= (3Q)/700 If the government imposes an excise tax of $0.50 per unit. What is the tax incidence on producers? (If you find that the incidence is $0.50 on producers enter your answer as 0.5).arrow_forwardDaniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets. A 10,000 percent tax on bullet ___ is not/is___ likely to generate a lot of revenue. Why might Senator Moynihan have proposed it? To boost the manufacturing industry of hollow-tipped bulletsTo raise revenue to support law enforcementTo discourage the use of hollow-tipped bulletsarrow_forwardSuppose a local government votes to impose an excise tax of $0.90 per bottle on the sales of bottled water. (Assume that all bottles are identical and residents cannot shop elsewhere.) Before the tax the equilibrium price and quantity are $1.20 and 2100 bottles per day. After the tax is imposed, market equilibrium adjusts to a price of $2.00 and quantity of 1400 bottles per day. How much revenue from the tax does the local government collect each day?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
