a subsidy is the opposite of a tax. with a $500 tax on the buyers of laptops, the government collects $500 for each laptop purchased, with a $500 subsidy for the buyers of laptops, the government pays buyers $500 for each laptop purchased. a) show the effect of a $500 per laptop subsidy on the demand curve for laptops, the effective price paid by consumers, the effective price received by sellers, and the quantity of laptops sold. b) do consumers gain or lose from this policy ? do producers gain or lose? does the government gain or lose ?
a subsidy is the opposite of a tax. with a $500 tax on the buyers of laptops, the government collects $500 for each laptop purchased, with a $500 subsidy for the buyers of laptops, the government pays buyers $500 for each laptop purchased. a) show the effect of a $500 per laptop subsidy on the demand curve for laptops, the effective price paid by consumers, the effective price received by sellers, and the quantity of laptops sold. b) do consumers gain or lose from this policy ? do producers gain or lose? does the government gain or lose ?
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 10PA
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a subsidy is the opposite of a tax. with a $500 tax on the buyers of laptops, the government collects $500 for each laptop purchased, with a $500 subsidy for the buyers of laptops, the government pays buyers $500 for each laptop purchased.
a) show the effect of a $500 per laptop subsidy on the demand curve for laptops, the effective price paid by consumers, the effective price received by sellers, and the quantity of laptops sold.
b) do consumers gain or lose from this policy ? do producers gain or lose? does the government gain or lose ?
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