EBK ESSENTIALS OF ECONOMICS
EBK ESSENTIALS OF ECONOMICS
8th Edition
ISBN: 8220103599832
Author: Mankiw
Publisher: Cengage Learning US
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Chapter 6, Problem 9PA
To determine

The impact of $5 tax on the ticket for match.

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At Fenway Park, home of the Boston Red Sox, seating is limited at 39,000,  Hence, the number of tickets issued is fixed at that figure (supply of tickets). Seeing a golden opportunity to raise revenue, the City of Boston levies a per ticket tax of $5 to be paid by each ticket buyer. Boston sports fans, a famously civic-minded lot, dutifully send in the $5 per ticket. Apply this information in terms of what this tells us about the elasticities of supply and demand.  Given your analysis of these elasticities, on whom does the tax burden fall....the tickets sellers, the fans or both?  Why?
Suppose the market for cigarette is competitive. An economist estimates the price elasticity of demand and supply for cigarette are -0.8 and 0.7 respectively.  Suppose the government imposes a per-unit tax of $45 on the cigarette sellers. By how much would buyers share the tax burden respectively? Show your calculation.
The figure below depicts a typical JMU student's demand for women's basketball games. $60 $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 0 2 3 5 6 7 How much consumer surplus would the student receive if they had to pay $25 for a ticket?
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