The market for skateboards currently has no taxes. The equilibrium quantity is 5,000/month, and the equilibrium price is $40. The governor is considering placing a $10/skateboard tax on skateboard producers, and expects to raise $50,000/month in revenue. Is the governor correct? O Yes, because producer and consumer responses will cancel out. O No, because the quantity produced and consumed will fall below 5,000/month once the tax is imposed. O No, because it doesn't matter whether the consumer or producer is taxed. O Yes, because 5,000 x $10 = $50,000.
Q: Suppose that the demand for tea in Boston is described by Quantity demanded = 20-p and the quantity…
A: A tax refers to a monetary obligation that individuals are bound to pay as producers or consumers to…
Q: Assume that the monthly demand for Gala apple in the US is given by q=1200-300p and quantity is in…
A: Government revenue = Tax amount * Equilibrium quantity after tax Deadweight loss = 0.5 * Tax amount…
Q: d. Suppose the Mayor of Celltown institutes a price floor of P = $250 in order to promote the new…
A: Price floor is the minimum price that a buyer can purchase for the good and it is set by the…
Q: Consider a market with an equilibrium quantity of 100 and an equilibrium price of $40. Suppose the…
A: In the market, equilibrium occurs at the intersection point of market demand and market supply…
Q: Suppose that the demand and supply functions for a good are given as follows: Demand: Q = 720 – 8P…
A: Demand : Qd=720-8P Supply : Qs=-160+3P Equilibrium: Demand=Supply Qd=Qs 720-8P=-160+3P…
Q: The market for skateboards currently has no taxes. The equilibrium quantity is 5,000/month, and the…
A: If the government is imposing the tax in the market of the skateboards that will lead to a decrement…
Q: Cars P S D Suppose that your city puts an excise tax on cars but collects the tax from car buyers…
A:
Q: Relationship between tax revenues, deadweight loss, and demand elasticity The government is…
A: a) For leather jackets : Tax revenue (green area) = 120 x 50 = $6,000 Deadweight loss (black area)…
Q: Suppose that the demand and supply functions for a good are given as follows: Demand: Q Supply: O…
A: Elasticity of demand refers to proportionate change in quantity demanded with proportionate change…
Q: Price Supply P' K P" L Y M B N Demand Quantity tefer to the figure. Suppose the government imposes a…
A: In the free market, the equilibrium price and quantity is determined by the forces of downward…
Q: Suppose that demand for gasoline is 0.5 (Ed=0.5) and the supply of gasoline pizza is 1.25 (E,=…
A: Elasticity measures the responsiveness of quantity to changes in price level.
Q: The following table is to be used for answering questions 9-12. Price per dozen…
A: Hi, thank you for the question. As per the guidelines, we are allowed to attempt only first…
Q: The government of your country has recently decided to put a tax on calling cards. This decision by…
A: Equilibrium is achieved at the output level where Qs equals Qd.
Q: Suppose that the government imposes a price ceiling of $7. What is the outcome? O A surplus of 60…
A: Option (3).
Q: а. What is the equilibrium price and quantity in the market? b. What is the equilibrium price and…
A: Inverse Demand Function: In the inverse demand function change in price is dependent on change in…
Q: A price floor is: O the maximum price that a seller can charge in a market. the minimum price that a…
A: Price floor is a situation when the price charged is more than or less than the equilibrium price…
Q: Daniel Patrick Moynihan, former senator from New York, once proposed a federal sales tax on…
A: The demand for a commodity would change with changes in consumers income, tastes and preferences,…
Q: Suppose the market supply and demand for guitars in Happy Valley are given by: Supply: Q=-60+3P…
A: Given QS=-60+3P QD = 540 - 5P
Q: 6. In the following question you are asked to determine, other things equal, the effects of a given…
A: The effect of the imposition of excise tax can be explained with the help of the diagram in the next…
Q: cream is given by QS = 4P - 10. Use negative signs where appropriate. Round to the st one-hundredth…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first three subparts for you.…
Q: Given that the U.S. government mandates the use of ethanol as a partial substitute for gasoline (10%…
A: A market demand curve for a commodity shifts as a result of change in consumer income, tastes and…
Q: A tax imposed on the sellers of a good will Select one: O a. raise the net price received by sellers…
A: A tax is levied by the government on goods and services. The tax imposed by the government raises…
Q: Figure Suppose that the government imposes a tax of P3 - P1. Answer questions 7 to 11 based on this…
A: Charges or taxes are required by legislatures on their residents to create pay for undertaking…
Q: If the government establishes a support price for sugar $12 per cwt. (Hundered pounds) and is…
A: The equilibrium price of a commodity is the price at which the quantity demanded of the commodity…
Q: Consider Panel d. The government has a price ceiling on ice cream at $4 per gallon... and then the…
A: A price ceiling is a restriction on the maximum price that may be charged for a good or service. The…
Q: Imagine that a dairy farmer is willing to provide milk to the market on the basis of the supply…
A: Supply curve shows different combinations of quantity supplied and prices. Subsidy increases…
Q: Price S1 20 18 16 14 SO Demand 300 400 500 1000 Quantity Assume that the market in the graph above…
A: Tax revenue is the money that government gets as tax receipts by taxing a good.
Q: Refer to the accompanying figure to answer the next three questions, Price P3 P2 P1 37,500 50,000…
A: Please find the answer below.
Q: If the government provides a subsidy to the producers of coffee and simultaneously charges a tax on…
A: The equilibrium price and quantity of a good sold in the market are determined by the forces of…
Q: The state of Colorado's excise tax on beer is 8 cents per gallon. Suppose that the excess burden…
A: At the point when a tax is presented, it generally influences the two shoppers and makers. The…
Q: Q Suppose that the market is initially at an equilibrium price of $6 and an equilibrium quantity of…
A: We show that deadweight loss from the tax given below
Q: Price MC, =S Ds D Quantity Figure 10 Demand and supply curves Towards the right of Figure 10 are two…
A: Subsidy refers to the sum of money provided by the government to suppliers or producers in order for…
Q: Yam has the following utility function for Apples (X1) and Ice Cream (X2). U(X1,X2) = Min{3X1,X2}.…
A: Two goods are perfect complements when both are consumed together in fixed proportion.
Q: The Market: SUVS (sports utility vehicles) The Market price: $50,000. The Scenario: A tax of $2,000…
A: The market is in equilibrium when the market demand is equal to the market supply. At this point the…
Q: 46. Given that the U.S. government mandates the use of ethanol as a partial substitute for gasoline…
A: Market demand for a commodity can change as a result of a change in consumers income, their tastes…
Q: Suppose we have the following demand and supply equations D(p) = 200 – p and S(p) = 150 + p a. What…
A: Since you posted a question with multiple sub-parts, we will solve first three sub-parts for you. To…
Q: Price ($) 40 25 15 5 3\ Quantity 15 25 50 75 100 200 Refer to the graph above. Suppose that the…
A: The answer is - Option a. No surplus or shortage, only equilibrium.
Q: 2. Consider a competitive market for apartments in Bandung. What is the effect on the equilibrium…
A: In competitive market, the equilibrium will be at the point where the demand and the supply curve…
Q: Suppose that the government imposes a constant per-unit tax of 2 cent on producers. In the diagram,…
A: Taxation basically refers to the usual process through which a government or other taxing body…
Q: Price (dollars per gallon of ice cream) 20 18 16 So 14 12 10 8 50 100 150 200 250 300 350 Quantity…
A: please find the answer below.
Q: Correctly illustrate the market (supply and demand curve). Make sure to correctly shade the area of…
A: Equilibrium price is the price at which quantity demanded equals quantity supplied and the market…
Q: The annual demand for imported oranges is given by the following equation: ?? = 600,000 − 30,000?…
A: Market equilibrium is the point where the demand is equal to the supply. The price at this point is…
Q: .In the market for nutritional bars there are two types of consumers: men and women. Suppose that…
A: For males, the elasticity of demand for nutritious bars is em = -2, whereas for women, it is ew =…
Q: Suppose that a market is described by the following supply and demand equations: Q = 2P QD = 300 - P…
A: The equilibrium price is the only price where the plans of consumers and the plans of producers…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Price S1 20 18 16 14 12 10 8. SO Demand 300 400 500 1000 Quantity Assume that the market in the graph above is at an initial equilibrium price of $10 and an equilibrium quantity of 500 units. If the government decides to add a $4 per-unit tax on this good, it will be able to collect the following amount of tax revenue: $1,200 $2,000 O $1,600The market for skateboards currently has no taxes. The equilibrium quantity is 5,000/month, and the equilibrium price is $40. The governor is considering placing a $10/skateboard tax on skateboard producers, and expects to raise $50,000/month in revenue. Is the governor correct? O No, because it doesn't matter whether the consumer or producer is taxed. O Yes, because producer and consumer responses will cancel out. O No, because the quantity produced and consumed will fall below 5,000/month once the tax is imposed. O Yes, because 5,000 x $10 = $50,000.Daniel Patrick Moynihan, former senator from New York, once proposed a federal sales tax on ammunition as a way to achieve gun control without violating the second amendment to the U.S. constitution. How might Moynihan's proposal work? Select one: O a. By increasing the cost of a substitute, it would decrease the demand for guns. O b. By increasing the cost of producing a gun, it would decrease the supply of guns. O c. By increasing the cost of a complement, it would decrease the demand for guns. O d. By increasing the cost of using the gun, it would decrease the supply of guns. Check Previous page Next page MacBook Pro G Search or type URL 2$ & * 7 8 9 CO
- If the government provides a subsidy to the producers of coffee and simultaneously charges a tax on tea, which of the following can (but not necessarily wilI) happen in the market for coffee? * O The equilibrium price and quantity both decrease. O The equilibrium price increases and the equilibrium quantity decreases. O The equilibrium price stays the same and equilibrium quantity decreases. The equilibrium price stays the same and equilibrium quantity increases. O The equilibrium price decreases and the quantity stays the same. Income elasticity measures the responsiveness of changes in income to changes in price. changes in quantity demanded to a change in income. changes in quantity demanded to a change in price. changes in income to changes in supply. O All of the above.1. Suppose that the market demand for coffee is Pd = 15 - Qd and the market supply is Ps= Qs - 5. What is the equilibrium price and quantity for coffee? Suppose that the government imposes a tax of $1 per unit to reduce coffee consumption and raise government revenues. What will be the new equilibrium quantity? What price will the buyer pay? What price will the seller receive? A o F2 BE #3 ㅁㅁ F3 $ A t 4 OFFIC DEO DOD 000 F4 % 5 F5 MacBook Air 6 F6 & 7 L * 8Don't use chatgpt and make sure you include the graphs needed (a) Suppose in a competitive market, the market demand curve for salt is infinitelyinelastic. What is the impact of a per-unit tax (i.e. a specific tax) on the priceof salt that consumers pay?(b) Suppose the demand curve for butter is Q = 50 − 3P and the supply curve isQ = 2P. Suppose the government announces a per-unit tax of 1 on the priceof butter. Tax on butter can be seen as a ’fat tax’. What is the overall effectof a fat tax on the consumers? (c) If you were a policymaker and wanted to promote a fat tax in the UK, whatwould you cover in your policy campaign?
- The quantity demanded of salt decreases when the price of pepper increases. This is an example of * own-price elasticity. supply elasticity. income elasticity. O rubber band elasticity. cross-price elasticity. If the government wants to put a per unit tax on a product so that it can raise revenue to support local schools, it would most likely accomplish this goal by doing which of the following? * O placing a tax on a good with an elastic demand. placing a tax on a good that has many substitutes. placing a tax on a good with an inelastic demand. placing a tax on a good with a perfectly elastic demand. O relying of the goodness of mankind and simply ask for donations.You're curious to know whether a good's price will rise or fall when we're entering a recession (and incomes fall). You'd need to find out whether the good is O a complement or a substitute O sold in a competitive market or in a monopoly a normal good or an inferior good on the demand side or supply side of the marketa) What is the Equilibrium Price and Equilibrium Quantity b) If the government imposes a $15 per unit tax on sellers on this good what is the new quantity sold in units, how much will the buyers pay, how much will sellers receive?, and how much will the government receive in tax revenue? c) What is the price elasticity of demand and over this price change? What about the supply? d) Based on the elasticities calculated above, who will bear a greater burden from the tax? Why?
- Suppose the demand for new automobiles in the United States is describedby the equation Qd = 5.3 - 0.1P where Qd is the number of new automobilesdemanded per year (in millions) when P is the average price of anautomobile (in thousands of dollars).a. What is the quantity of automobiles demanded per year when the averageprice of an automobile is $15,000? When it is $25,000? When it is$35,000?b. Sketch the demand curve for automobiles. Does this demand curve obeythe law of demand?Suppose that the demand curve for wheat is Q500 - 10p and that the supply auve is O 10p What are the efects of a subnidy (negative tax) ofs4 per unit paid to produoers on the equlibrium, govemment. subsidy cost, consumer surplus (CS), producer surplus (PS), weifare (W, and deadweight loss (DWL)? Wih the subsidy, the equibrium price is Sand the equilibrium quantity isunits. (Enter your responses as whole numbers) The cost of the subsidy to the govermment is S (Enter your response as a whole number) The change in consumer surplus (ACS) is S (Enter your response as a whole number.) The change in producer surplus (APS) is S Enter your response as a whole number) The change in welttare (AW) is S (Enter your reaponse as a whole number and include a minus sign i necessary Deadweight loss is S (Ender your response as a whole number)Suppose that demand for gasoline is 0.5 (Ed=0.5) and the supply of gasoline pizza is 1.25 (E, = 1.25). If the government imposes a $1 per gallon excise tax on the production of gasoline, then the price that consumers pay will and the price that producers receive will O increase by more than $0.50; decrease by more than $0.50. O increase by more than $0.50, but less than $1; increase by more than $0.50, but less than $1. increase by more than $0.50, but less than $1; decrease by less than $0.50. decrease by more than $0.50, but less than $1; increase by less than $0.50. increase by less than $0.50; decrease by more than $0.50, but less than $1.