Question

Question 15 6 pts Figure 8 per unit $100 $90 ..... $80 $701 $60 $501 $401 $30 $20 $10 0 1 2 3 4 5 6 7 8 9 10 11 12 Quantity (in thousands)

NOT SURE IF MY ANSWERS ARE CORRECT. Please help and see for any corrections!

Answer 1

Before tax

1) eqm Q : 8000

2) Buyers pay : 60

3) sellers receive: 60

Let tax on sellers , so Supply Curve shifts upwards by 30

4) Quantity: 4000

Question 15 6 pts Figure 8 per unit $100 $90...... $801 $70 $60 $501 $401 $30 $20 $10 0 1 2 3 4 5 6 7 8 9 10 11 12 Quantity (in thousands)

5) buyers pay : 80

6) sellers receive: 50

7) before tax , CS =.5*(100-60)*8000

= 20*8000

= 160,000

8) PS= .5*(60-40)*8000

= 80,000

9) TS = 160,000+80,000

= 240,000

10) after tax, CS = .5*(100-80)*4000

= 40,000

11) PS = .5*(50-40)*4000

= 20,000

12) tax Revenue = 30*4000

= 120,000

13) total Surplus = 40,000+20,000+120,000

= 180,000

14) DWL = .5*30*4000

= 60,000

15) burden on buyers = (80-60)

= $ 20

16) on sellers = $10

17) demand curve is less Elastic

18) burden falls more on buyers