Homework Answers
a) Consumer surplus before tax is area of portion A + B + C whose sum is (1/2) * (40 - 0) * (10 - 2) = 160
Consumer surplus post tax is area of portion A whose sum is (1/2) * (20 - 0) * (10 - 6) = 40
Thus, option C is correct.
b) If the market demand and supply curve is more elastic, increasing the amount of excise tax will reduce the tax revenue. Option A is correct.
The reason for this is that as consumers are more resposive to goods when demand and supply is elastic and reduce the quantity demanded when price rises due to tax. It will cause tax revenue to fall.
A cash-starved town decides to impose a $5 excise tax on T-shirts sold. The following table...
A cash-starved town decides to impose a $5 excise tax on T-shirts sold. The following table shows the quantity demanded and the quantity supplied at various prices. (Assume that the infinitely divisible) Price quantity quantity per shirt demanded supplied $190 60 $16 10 50 $13 20 40 $10 30 30 $7 40 20 $4 50 10 a. What are the equilibrium quantity and price before the tax is implemented? Determine the consumer and producer surplus before the tax. b. What...
2. Taxes and welfare Consider the market for mountain bikes. The following graph shows the demand...
2. Taxes and welfare Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the...
Piano Lessons Price $50,- 50 10 20 30 40 Quantity (hours of instruction) Which event would...
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it’s post-election and a new city council Homework #6 (15 points) 1. It's post-election and a...
it’s post-election and a new city council
Homework #6 (15 points) 1. It's post-election and a new city council is in place. In an attempt to generate revenue the city council votes to impose a $6.00 excise tax on T-shirts sold. Given the following table, answer the questions below. Price T-shirt $19 $16 $13 $10 $7 $4 0 10 20 30 40 50 60 50 40 30 20 10 a. Graph the above table, on the graph below. b. What...
Consider the market for mountain bikes. The following graph shows the demand and supply for mountain...
Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer...
show graphs too Search this Ch 4 HW pt2 Consider the market for commercial fans. The...
show graphs too
Search this Ch 4 HW pt2 Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point...
Question 36 Figure 6-32 Price 20 ELENTEND 10 20 30 40 50 60 70 80 100...
Question 36 Figure 6-32 Price 20 ELENTEND 10 20 30 40 50 60 70 80 100 Quantity Refer to Figure 6-32. Which of following statements is true based upon the conditions in the market? a shortage will develop when a price ceiling is imposed at a price of S10. a surplus will develop when a price floor is imposed at a price of $8. a surplus will develop when a price floor is imposed at a price of $12. a...
D Question 23 Price (dollars per tire) S + tax 0 10 20 30 40 50...
D Question 23 Price (dollars per tire) S + tax 0 10 20 30 40 50 60 70 Quantity (millions of tires per month) The figure above shows the market for tires. The government has imposed a tax on tires, and the buyers pay— $10 $20 $50 $60 $30
Calculate the daily total revenue when the market price is $80, $70, $60, $50, $40, $30,...
Calculate the daily total revenue when the market price is $80, $70, $60, $50, $40, $30, $20, and $10 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph 1140 1045 950 855+ 760 665 570 475 380 285 190 95 Total Revenue 0 612 18 24 30 36 42 48 54 60 QUANTITY (Bippitybops per day) According to the midpoints formula, the price...
P (S) 50 45 40 35 30 25 20 15 o 20 30 40 50 60...
P (S) 50 45 40 35 30 25 20 15 o 20 30 40 50 60 70 80 90 100 110 120 130 140 150 -5 -10 Suppose that there are 5 people with identical preferences around a pure public good. For each individual (i e {1, 2, 3, 4, 5]) the Private Marginal Benefit (PMB,) from a pure public good is given by PMB, 10-0.1G, where G is the quantity of the pure public good. 1. Draw the Private...
A cash-starved town decides to impose a $5 excise tax on T-shirts sold. The following table shows the quantity demanded and the quantity supplied at various prices. (Assume that the infinitely divisible) Price quantity quantity per shirt demanded supplied $190 60 $16 10 50 $13 20 40 $10 30 30 $7 40 20 $4 50 10 a. What are the equilibrium quantity and price before the tax is implemented? Determine the consumer and producer surplus before the tax. b. What...
2. Taxes and welfare Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the...
Piano Lessons Price $50,- 50 10 20 30 40 Quantity (hours of instruction) Which event would shift the demand curve for piano lessons from Dto D2, as shown in the diagram? a decrease in the price of pianos an increase in the price of piano lessons a decrease in the price of piano lessons O an increase in the price of pianos Question 2 A decrease in expected future supply of a good will lead to: a change in the...
it’s post-election and a new city council
Homework #6 (15 points) 1. It's post-election and a new city council is in place. In an attempt to generate revenue the city council votes to impose a $6.00 excise tax on T-shirts sold. Given the following table, answer the questions below. Price T-shirt $19 $16 $13 $10 $7 $4 0 10 20 30 40 50 60 50 40 30 20 10 a. Graph the above table, on the graph below. b. What...
Consider the market for mountain bikes. The following graph shows the demand and supply for mountain bikes before the government imposes any taxes First, use the black point (plus symbol) to indicate the equilibrium price and quantity of mountain bikes in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer...
show graphs too
Search this Ch 4 HW pt2 Consider the market for commercial fans. The following graph shows the demand and supply for commercial fans before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point...
Question 36 Figure 6-32 Price 20 ELENTEND 10 20 30 40 50 60 70 80 100 Quantity Refer to Figure 6-32. Which of following statements is true based upon the conditions in the market? a shortage will develop when a price ceiling is imposed at a price of S10. a surplus will develop when a price floor is imposed at a price of $8. a surplus will develop when a price floor is imposed at a price of $12. a...
D Question 23 Price (dollars per tire) S + tax 0 10 20 30 40 50 60 70 Quantity (millions of tires per month) The figure above shows the market for tires. The government has imposed a tax on tires, and the buyers pay— $10 $20 $50 $60 $30
Calculate the daily total revenue when the market price is $80, $70, $60, $50, $40, $30, $20, and $10 per bippitybop. Then, use the green point (triangle symbol) to plot the daily total revenue against quantity corresponding to these market prices on the following graph 1140 1045 950 855+ 760 665 570 475 380 285 190 95 Total Revenue 0 612 18 24 30 36 42 48 54 60 QUANTITY (Bippitybops per day) According to the midpoints formula, the price...
P (S) 50 45 40 35 30 25 20 15 o 20 30 40 50 60 70 80 90 100 110 120 130 140 150 -5 -10 Suppose that there are 5 people with identical preferences around a pure public good. For each individual (i e {1, 2, 3, 4, 5]) the Private Marginal Benefit (PMB,) from a pure public good is given by PMB, 10-0.1G, where G is the quantity of the pure public good. 1. Draw the Private...
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