What is the effect of a $1 specific tax collected from producers on equilibrium price and quantity if supply is perfectly elastic?Price increases by $1 and quantity decreasesWhat is the incidence on consumers? Explain.The incidence of the tax that falls on consumers ispercent (enter a numeric response using an integer) because producers areV price sensitive.étv2MacBook Air80DIIDDescF6F7F8F9F10F1F2F3F4F5#$%&*1239

In a market, imposition of tax will have significant impact on the price received by seller and…

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Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter5: Elastic And Its Application

Section: Chapter Questions

Problem 10PA

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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?
When airfares between Santa Rosa and Los Angeles averages $69, the quantity consumed is 42,500 tickets. One day, an airline tax is levied equal to $10.00 and output falls to 37,000 tickets. Assume that air travelers end up paying 75% of the tax. Calculate the price elasticity of demand and & interpret coefficient. Use the general formula, not the mid point formula Calculate the price elasticity of supply and interpret coefficient. Use the general formula, not the mid point formula. How do total sales in the airline market before and after the tax support your answer in (n) and/or (o)?
In 2018, Amazon raised the annual subscription fee for its Prime membership service, which provides free two-day shiping on many goods and other benefits, from $9 to$19. Piper Jafray, an ivestment bank, estimated tha before the price increase, Prime had 77 milon U.S subscribers.3 The bank speculated that the number of memberswould fall to about 62 million. If so, what is the arc elasticy of demand for a Prime membership?
Hi may explain to me how to solve the question step by step? TQ Sally Henin has a price elasticity of demand for gasoline of -0.8. Her income elasticity for gasoline is 0.5. Sally's current income is $40,000 per year. Sally currently spends $800 per year on gasoline. The price of gasoline is currently $1.00 per gallon. a. A contemplated excise tax on gasoline will cause the price of gasoline to rise to $1.40. What impact will the tax have on Sally's consumption of gasoline? b. Since the purpose of the tax is only to discourage gasoline consumption, Congress is considering a $200 income tax rebate to lessen the burden of the gasoline tax. What impact will the rebates have on Sally's consumption of gasoline? 3. Assume that both the tax and rebate are implemented. Will Sally be worse off or better off?
Alcohol, tobacco, and gasoline have inelastic demand, so the buyers of these items pay most of the tax on them.” Show and explain this statement with the help of hypothetical demand and supply graph.
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4 Q-2Economics deals with the question as to “how to acquire more and more wealth by a nation,” and “how to utilize this wealth for obtaining material gains of human life.” Explain in detail what are the various sources of income for Oman and how it spends the income for the development of the country. Q-3Provide a situation where “more than unit elastic demand” is shown. Illustrate your answer by presenting suitable consumer produc in a graph. I need answer for two 2 queation and seapachily for 3
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Country Z produces and consumes only two products: milk and bread. The price elasticity of demand ofbread is Ed = −0.1 = 0.1 and the price elasticity of demand of wheat is Ed = −2 = 2The government of country Z needs a significant amount of fund to tackle the current coronavirussituation. To obtain the fund, they have decided to impose a $ 5 tax on either the sellers of rice or thesellers of wheat. Currently, both the equilibrium prices of wheat and rice are $20 per unit respectively.The equilibrium quantities of wheat and rice are 10,000 units (per day) respectively.As the economic advisor of country Z, what would you advise the government of country Z. Whichproduct should they tax to obtain the fund to tackle the coronavirus situation? Discuss in detail using theModel of Demand and Supply (your answer should include two well labeled graphs).
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Effect of a tax on buyers and sellers The following graph shows the daily market for jeans. Suppose the government institutes a tax of $10.15 per pair. This places a wedge between the price buyers pay and the price sellers receive. 0100200300400500600700800900100050454035302520151050PRICE (Dollars per pair)QUANTITY (Pairs of jeans)Tax WedgeDemandSupply Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay Price Sellers Receive (Pairs of jeans) (Dollars per pair) (Dollars per pair) Before Tax After Tax Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden Elasticity…

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