Figure 6 below represents a market with a tax that has been imposed on it. Use it to answer the questions that follow. P2* P1* H B G F C D Q2* Q1* Figure 6 S2 S1 D
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- 1. Price 10 D, 10 15 Quantity The above graph shows a market with a tax imposed on consumers of a good. (a) On the graph, shade or label the region equal to the deadweight loss of the tax. Calculate the size of the deadweight loss. (b) On the graph, shade or label the region equal to the tax revenue from the tax. Calculate the size of the tax revenue.Price (dollars per tire) S + tax 70 60 50 40 D 30 20 10 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 of the tax. tires, and the buyers pay A) $50 B) $60 C) $20 D) $10Price (dollars per tire) S + tax 70 60 50 40 D 30 20 10 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 sellers tax burden is A) $50 B) $10 C) $60 D) $20
- Question 18 P 34 30 22 18 E2 E1 A subsidy for buyers A tax on buyers A tax on sellers A subsidy for sellers S D1 D2 Q Consider the graph. What would most likely be the cause of a shift from D1 to D2? Som autoIf the government removes a tax on a good, then the quantity of the good sold will______.The demand for tomatoes is Q = 40-4P and the supply of tomatoes is Q = P +10. Answer the following questions. (a) Suppose that $1 per unit tax is levied on the consumers. Who bears the economic incidence of this tax? (b) Calculate the deadweight loss (c) Suppose that stores will pay $1 per unit tax directly. What will happen to the "sticker price" on tomatoes? How will the size of the consumer tax burden change? (d) Suppose that tax is increased to $2 per unit on the consumers. Calculate the deadweight loss. Compare the size of the deadweight loss with (b).
- How does a tax on buyers affect the market equilibrium?In a market where the supply curve is perfectly inelastic how does an excise tax affect the price paid by consumers and the quantity bought and sold?Figure 6-33 The diagram shows the effect of a tax as measured by the distance between) and K. Price 100 Refer to Figure 6-33. Bund upon the diagram the incidence of the tas falls more heavily on buyers. the incidence of the tax falls more heavily on sellers the incidence of the tax is shared equally by both buyers and sellers the incidence of the tax cannot be determined based upon the information in the diagram
- Price Pa Pb ££ Pc Qt Q* Supply Demand Quantity The government imposes an excise tax on the market, what is the size of the tax? A) Pa-Pb B) Pa-Pc C) Pb-Pc D) PbThe diagram below shows demand and supply curve for Kimchi. The government imposes per-unit of tax on the Kimchi and this is shown by the shift of the supply curve from 50 to S1. Answer the following questions based on the diagram. Price (RM) SO 10 8 4 Quantity 50 100 a. Define market equilibrium. Determine the equilibrium price and quantity of Kimchi before and after the tax. (4 marks) DOQuestion 7 Read the following scenario and answer the questions that follow. Scenario 4 In the market for cigarettes the impact of a specific excise tax of R10,00 is depicted in the diagram below. D ST Тах E 55,40 50,00 45,40 E2 21,00 ST S 11,00 Q 50 120 150 200 Packets per week (thousands) In the absence of any excise tax, a packet of cigarettes cost R50,00 and the equilibrium quantity is 150 000 packets per week. For scenario 4, discuss the impact of a specific excise tax of R10,00 in the market for cigarettes with reference to the provided diagram. Your discussion should incorporate the change in price received by suppliers and paid by consumers owing to the imposition of the specific excise tax. 7.1. Price per packet (R)