EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 8, Problem bFCT
To determine
To show: The reasons for which economists think that underground activities lower the federal tax payments by a stupendous amount of $500 billion or so.
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Now calculate the government's tax revenue if it sets a tax of $0, $20, $40, $50, $60, $80, or $100 per bottle. (Hint: To find the equilibrium quantity
after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using
the green points (triangle symbol) to plot total tax revenue at each of those tax levels.
Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.
TAX REVENUE (Dollars)
4000
3600
3200
2800
2400
2000
1600
1200
800
400
0
0 10
20
True
30 40 50 60 70
TAX (Dollars per bottle)
False
80
+
90
100
pose the government is currently imposing a $60-per-bottle tax on gin.
Laffer Curve
True or False: The government can raise its tax revenue by increasing the per-unit tax on gin.
?
“The Prime Minister claims that funding the increase in NHS and social care spending by national insurance [paying higher NICs] is preferable, because firms pay part of the cost. This is a fiction. In the long run the burden of payroll taxes, even those paid by companies, falls on workers, whose wages fall as their employers’ tax bills rise.” The Economist 11-09-202.
Is “The Economist” right in its counter-claim? (Hint: use a market equilibrium model of demand and supply for labour)
(30%) (page 5 of 6) - Profile 1 - Microsoft Edge
=://2023.tle.courses.open.uwi.edu/mod/quiz/attempt.php?attempt=12768&page=4&cmid=37072
The Learning Exchange 2023
Suppose now that the government decides to increase the number of quotas available to 72 units, but it keeps the
price support at the current level of $72.
(HINT: Sketch the supply and demand equations.)
d) Calculate
(1) the consumer surplus, 529
(ii) the producer surplus, 506
(iii) deadweight loss (use 2 decimal places), 88.02
(e)
Which of the two options would the producers prefer?
Option 1 +
(f) Which of the two options would be preferred by society? Option 1
Chapter 8 Solutions
EBK ECONOMICS TODAY
Ch. 8 - Prob. 8.1LOCh. 8 - Prob. 8.2LOCh. 8 - Prob. 8.3LOCh. 8 - Prob. 8.4LOCh. 8 - Prob. 8.5LOCh. 8 - Prob. aFCTCh. 8 - Prob. bFCTCh. 8 - Prob. cFCTCh. 8 - Prob. dFCTCh. 8 - Prob. eFCT
Ch. 8 - Prob. fFCTCh. 8 - Prob. 1CTQCh. 8 - Prob. 2CTQCh. 8 - Prob. 1FCTCh. 8 - Prob. 2FCTCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18P
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