The reasons for whether the taxes are paid more by buyer orseller, andto show the same on graph.

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Chapter 8, Problem 1IAPA

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The reasons for whether the taxes are paid more by buyer orseller, andto show the same on graph.

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2.) Beer Tax Analysis Complete all parts of practice problem #4 on page 129 of Mankiw. Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer purchased. (In fact, both the federal and state governments impose beer taxes of some sort.) a. Draw a supply-and-demand diagram of the market for beer without the tax. Show the price paid by consumers, the price received by producers, and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by producers? b. Now draw a supply-and-demand diagram for the beer market with the tax. Show the price paid by consumers, the price received by producers, and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by producers? Has the quantity of beer sold increased or decreased?

Question: 2The government is interested in imposing a tax to generate revenue X. It is considering whether they should tax the consumer’s income or impose a tax on a commodity y. What should the government do if they do NOT care about consumer welfare? Use three graphs to illustrate your answer and explain those graphs in your answer.

7. Effect of a tax on buyers and sellers The following graph shows the weekly market for handbags in some hypothetical economy. Suppose the government levies a tax of $11.60 per bag. The tax places a wedge between the price buyers pay and the price sellers receive.