To answer Questions #1 and #2, refer to the following diagram, which shows the monthly cigarette market in Wake County,North Carolina and the demand for, and supply of, cigarettes before and after the imposition of a $5.00-dollar per unit excisetax.Exam 2, Figure 1- The Wake County Market for CigarettesPer Pack PriceSupply with tax20.00Supply before tax18.0016.00Demand10.00Quantity Per Year(Milions of Packs)2Ceteris paribus, how much will the government collect in annual tax revenue from this tax?Select one:O a. $5 millionOb. $10 millionO c. $15 millionO d. $20 million What is the deadweight loss from this tax?Select one:Oa. $1.0 millionOb. $2.0 millionc. $2.5 milliond. $5.0 million

The tax is the mandatory unilateral payment which is made by the public towards the government for…

Answered: To answer Questions #1 and #2, refer to…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 20RQ: Under which circumstances does line tax burden fall entirely on consumers?

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TO - Now suppose that the Demand curve is actually slightly more inelastic, and the Supply curve is actually much more elastic than in the previous graphs, as shown in the following figure. Notice that a $2/latte tax is still implemented. Venti Pumpkin Spice Lattes P $7.50 $6.50 in $5 $4.50 $4.25 $4 $3 4 10 14. What price will Consumers now have to pay for a PSL?: Pº = $ 15. What price will Producers now receive for a PSL, after the tax?: PP = $- 16. How many PSLS will now be sold?: Q Lattes 17. How much Consumer Surplus is created in this market?: CS = $- 18. How much Producer Surplus is created in this market?: PS = $- 19. How much Tax Revenue does the government receive in this market?: TAXREV = $. 20. How much Dead Weight Loss is created in this market?: DWL= $.
A state tax on portable electronic devices causes sales of a single model of a handheld calculator to decrease from 80 to 70 per week. The tax is assessed as a tax on sellers when they receive the units from suppliers. Drag the appropriate curves (including the Quantity curve) to show the effects on the market. To refer to the graphing tutorial for this question type, please click here. Price (S) 100 100 Quant 140 130 120 110 100 GO 80 80 70 00 00 40 30 20 10 80 Quantity (per week) What tax revenue will the state collect from sales of this one model of calculator through the new tax? The tax revenue is $ per week.
Suppose a $1 excise or commodity tax is placed on the purchasers of cans of soda. Use the graph to illustrate the impact this tax would have on the soda market and answer the questions. Be certain to shift the entire curve, endpoint to endpoint. Price per can (5) 10 9 8 7 3 2 1 0 1 deadweight loss: $ 0123456789 10 11 12 13 14 15 16 17 18 19 20 Cans of soda per day (in tens of thousands) Calculate the deadweight loss of the tax. Enter the answer in thousands. Supply Demand deadweight loss: $ 0123456789 10 11 12 13 14 15 16 17 18 19 20 Cans of soda per day (in tens of thousands) Demand Calculate the deadweight loss of the tax. Enter the answer in thousands. The tax would affect a household's Choose the answer that best describes the impact this tax would have on a household's economic income and whether it would cause a large change in the household's consumption of soda. This sort of change in behavior is called tax shifting. O uses side, but tax shifting is not likely to occur. O…
The table below presents the annual market for sofas in Akron, Ohio. Suppose the state government imposes a $250 excise tax on every sofa sold to be paid by customers at the point of sale. Market for Sofas Price (dollars) $1,240 1,180 1,120 1,060 1,000 940 880 820 760 780 Quantity of Sofas Demanded INO 200 230 260 290 320 350 380 410 449 M 470 Quantity of Sofas Supplied 300 TYGO 280 260 240 220 200 sofas 180 160 140 120 Quantity of Sofas Demanded with Excise Tax 50 80 118 140 WACH178 200 230 260 290 320 Instructions: Enter your answers as a whole number. a. Before the excise tax is imposed, what are the equilibrium price and quantity of sofas in Akron? b. Including the excise tax, what is the new equilibrium price consumers pay for sofas after the tax is imposed? $ c. After the excise tax is imposed, what is the new equilibrium quantity of sofas? sofas d. What is the total amount of revenue collected by the government from the excise tax on sofas? $
Consumers of gasoline in (Manhattan) New York are known to have an elastic demand to price of gasoline, whereas those in (Los Angeles) California are inelastic in their demand to gasoline prices. Explain and analyze the effects of a gasoline tax imposed in these two states (of equal dollar-value) by answering the following questions: (a) Graphically represent the above scenario in each state, one graph representing the gasoline market in each state. On each graph clearly show: (i) Both the axes (ii) Supply and Demand schedules (iii) The shift in the relevant schedule as a result of the tax (iv) The area denoting the revenue given to the government by the consumers and the producers (v) The Deadweight loss
You are Lori Lightfoot. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2 demand schedules are as follows. Gas price Gallons demanded (in millions) CTA fare Number of riders (one way) (in millions) $4.50 1 $2.00 6 4.00 1.1 1.75 8 3.50 1.2 1.50 10 3.00 1.3…
On the following graph, use the black curve (plus symbols) to illustrate the deadweight loss in these cases. (Hint: Remember that the area of a triangle is equal to x Base × Height. In the case of a deadweight loss triangle found on the graph input tool, the base is the amount of the tax and the height is the reduction in quantity caused by the tax.) 2400 2160 1920 Deadweight Loss 1680 1440 1200 960 720 480 240 10 20 30 40 50 60 70 80 90 100 TAX (Dollars per bottle) As the tax per bottle increases, deadweight loss DEADWEIGHT LOSS (Dollars)
38. The following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. What will be consumer’s tax incidence (i.e. extra price increase faced by consumers)? $2 $1 $0 $0.50
You are Lori Lightfoot. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2 demand schedules are as follows. Gas price Gallons demanded (in millions) CTA fare Number of riders (one way) (in millions) $4.50 1 $2.00 6 4.00 1.1 1.75 8 3.50 1.2 1.50 10 3.00 1.3…
To raise funds aimed at providing more support for public schools, a state government has just imposed a unit excise tax equal to $4 for each monthly unit of cell services sold by each company operating in the state. The following diagram depicts the positions of the demand and supply curves for cell services before the unit excise tax was imposed. Use this diagram to determine the position of the new market supply curve now that the tax hike has gone into effect. a. Does imposing the $4-per-month unit excise tax cause the market price of cell services to rise by $4 per month? Why or why not? b. What portion of the $4-per-month unit excise tax is paid by consumers? What portion is paid by providers of cell services?
You are Lori Lightfoot. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2 demand schedules are as follows. Gas price Gallons demanded (in millions) CTA fare Number of riders (one way) (in millions) $4.50 1 $2.00 6 4.00 1.1 1.75 8 3.50 1.2 1.50 10 3.00 1.3…
You are Brandon Johnson. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2 demand schedules are as follows. Gas price Gallons demanded (in millions) CTA fare Number of riders (one way) (in millions) $4.50 1 $2.00 6 4.00 1.1 1.75 8 3.50 1.2 1.50 10 3.00 1.3…

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