The graph below shows supply and demand curves before tax Price $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 I 0 14 28 42 1 Market Equilibrium 56 70 84 98 Quantity Supply-Demand 112 126 140 154 Calculate how much tax revenue the government will raise if it imposes a $15 tax on this good 168 182

The graph below shows supply and demand curves before tax Price $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 I 0 14 28 42 1 Market Equilibrium 56 70 84 98 Quantity Supply-Demand 112 126 140 154 Calculate how much tax revenue the government will raise if it imposes a $15 tax on this good 168 182

Principles of Microeconomics (MindTap Course List)

8th Edition

ISBN:9781305971493

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter8: Application: The Cost Of Taxation

Section: Chapter Questions

Problem 2QR

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Use the following table to answer the question about taxes, where P Price buyers pay, P, Price sellers receive, and Qe equilibrium quantity. Table No Tax With Tax 514 $15.00 $14 $13.00 4200 3700 How much is the tax and how much revenue is generated from the tax? Hint: Use the data to draw the graphs and find the slopes. O&$1:53,700 b. 52:57.400 9c. $2,51,000 Od $2:$500 922
The graph below shows supply and demand curves before tax Price $65 $60 $55 $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 0 T 14 I 28 V 42 1 Market Equilibrium 56 1 70 1 84 - - Supply 1 98 Quantity 1 112 Demand 11 V 1 126 140 154 168 182 Calculate dead-weight loss after the government imposes a $45 tax on this good
6. Governor Gavin Newsom wants to raise money. He has a choice of imposing an excise tax of the same amount on one of two previously untaxed goods: restaurant meals or sales of gasoline. Both the demand and the supply of restaurant meds are more elastic than the demand for and the supply of gasoline. Do the following: a. Draw a diagram that illustrates the tax revenue and deadweight loss from taxation of restaurant meals b. Draw a diagram that illustrates the tax revenue and deadweight loss from taxation of [gasoline. If the goal was to maximize government tax revenue, which item should be taxed? |Why? c.
Figure 4-5. The graph shows the impact of an excise tax. Price $2.00 1.50 1.00 .50 B A M E H K I 350 F 500 Quantity tax G Stax $1.00 for consumers and $0.50 for producers $1.00 for consumers and $1.00 for producers. $0.25 for consumers and $0.75 for producers. $0.50 for consumers and $0.50 for producers. S DSR Refer to Figure 4-5. The amount of the actual tax burden paid by consumers and producers is
6. Governor Gavin Newsom wants to raise money. He has a choice of imposing an excise tax of the same amount on one of two previously untaxed goods: restaurant meals or sales of gasoline. Both the demand and the supply of restaurant meals are more elastic than the demand for and the supply of gasoline. Do the following: a. Draw a diagram that illustrates the tax revenue and deadweight loss from taxation of restaurant meals b. Draw a diagram that illustrates the tax revenue and deadweight loss from taxation of gasoline. c. If the goal was to maximize government tax revenue, which item should be taxed?Why?
ewenseal Figure 4-9 S2 $1.40 S, 1.20 1.00 D 90 100 Quantity (billions of gallons) Refer to Figure 4-9. The market for gasoline was initially in equilibrium at point b and a $.40 excise tax is illustrated. What does the triangular area abc represent? O the revenue the government derives from the tax the tax paid by consumers the tax paid by producers the deadweight loss (or excess burden) created by the tax Price
The graph shows the demand and supply of bungee jumps in Xtremeland. The government decides to impose an 200 Supply 180 excise tax on bungee jumps to help pay for the high 160 number of back and neck injuries. 140 120- 100- 80 60- 40 Demand 20- 50,000 0 10,000 30,000 70,000 Quantity of bungee jumps What would the government's tax revenue be if it imposes a tax of $80 on each jump? What would the government's tax revenue be if it imposes a tax of $40 on each jump? What would the government's tax revenue be if it imposes a tax of $120 on each jump? Price of bungee jumps (S)
Question 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)
1. Consider the market for candy bars given below. Suppose that the government imposes a tax of $2 per candy bar in this market. Show on the graph and calculate the following: Price 5 $4.50 $4 $3.50 Supply 53 $2.50 $2 $1.50 $1 Demand S0.50 400 800 1200 1600 2000 2400 2800 3200 3600 4000 Candy Bars A. The quantity the market will produce with the tax. B. The government revenue from the tax. C. The deadweight loss from the tax. D. The consumer surplus with the tax. E. The producer surplus with the tax.