Suppose that the government had to raise the money to fund this program in a different...
Suppose that the government had to raise the money to fund this program in a different market. This market was characterized by the supply and demand curves, Qs= 100p Qd= 4000−100p. What is the per-unit (or specific) tax that government would need to impose in order to raise the revenue for the deficiency payment? ii. What is the deadweight loss caused by this tax? (If you weren’t able to solve the previous part, then assume that the tax is $1.00 per unit, though this is not the correct answer.)
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Suppose that the government had to raise the money to fund this
program in a different...
4. Suppose that the government can raise the same amount of money by imposing a tax...
4. Suppose that the government can raise the same amount of money by imposing a tax of $5 per shirt sold in years 1 and 2 or a tax of $10 per shirt sold in year 1 and $0 per shirt sold in year 2. Draw a supply-demand diagram for shirts for year 1 and another for year 2. a. Impose a tax of $5 per shirt in each year and show on the graph the resulting excess burden. b. ...
1) Assume that the market demand and supply functions for Nice to See book factory shelves...
1) Assume that the market demand and supply functions for Nice to See book factory shelves are: QD = 720 - 12P (Market Demand) QS = -240 + 20P (Market Supply) where QD is the market demand of book shelves, QS is the quantity of book shelves produced and P is the market price per unit. (i) Calculate the equilibrium quantity and price for the book shelves before and after the imposition of a RM15 per unit tax. (12 marks)...
PROBLEM: Consider a competitive market characterized by the following supply and demand formulas: Demand: P =...
PROBLEM: Consider a competitive market characterized by the following supply and demand formulas: Demand: P = 105 - 0.25QD Supply: P = 0.275QS (a) Show the supply and demand curves and the equilibrium price and quantity in this market in a diagram. (b) With the aid of a diagram, carefully explain what would happen in this market if the government were to impose a price floor of $80 per unit in this market. As part of your answer, calculate the...
The equations represent the demand and supply for silver pendants. The government is considering imposing a...
The equations represent the demand and supply for silver pendants. The government is considering imposing a $4 per unit tax of buyers of silver pendants. QD= 50,000-2,000P QS= -10,000+2,000P QD (with tax)= 50,000-2,000(P+T) 1. What is the before tax equilibrium price (P) and quantity (Q- in thousands) of pendants? a. P= $50; Q= 10 thousand b. P= $20; Q= 15 thousand c. P= $15; Q= 20 thousand d. P= $10; Q= 30 thousand. 2. Who carries the highest incidence of...
ECON 1150
The government is considering placing a $4 per unit tax on either Harry Potter books or Ikea clocks. The supply and demand curves for each market are given as: - Harry Potter books: Qd= 200 - 20P and Qs =P- Ikea clocks: Qd =100-2P and Qs= P a. On a single graph, draw and label the two demand curves and supply curves. b. Using your economic intuition, explain which good should be taxed if the government wants to maximize tax revenue? c. On another...
The demand and supply conditions of market for beer are given by the following equations: Qd...
The demand and supply conditions of market for beer are given by the following equations: Qd = 72 - P and Qs = -18 + P a) Find the initial equilibrium price and quantity. b) Calculate the consumer surplus and producer surplus for the equilibrium. c) Suppose that government impose a price floor at P=66 to control the consumption of beer. Is this policy effective? What are price and quantity consumed after this intervention of government? d) Going back to...
5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in...
5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in a market represented by the following equations: QD = 15 - 10P QS = 40P - 50 where Q is millions of bottles per year and P measures dollars per bottle. The equilibrium price of bubbly water is $1.30 per bottle and 2 million bottles are sold each year. (a) Calculate the price elasticity of demand and the price elasticity of supply at the...
5. Consider a market in which demand and supply have the following functional forms: The free-market...
5. Consider a market in which demand and supply have the following functional forms: The free-market equilibrium is at P = $24 and Q = 12. Qd = 24-1/2PB and Qs = -12+PS a. Graph the free market equilibrium in the space below. Label the curves and show the values of ALL intercepts (show your work to find them). b. Now suppose that the Government decides to impose a $6 per-unit subsidy in this market. Calculate the price paid by...
5. Consider a market in which demand and supply have the following functional forms: The free-market...
5. Consider a market in which demand and supply have the following functional forms: The free-market equilibrium is at P = $24 and Q = 12. Qd = 24-1/2PB and Qs = -12+PS a. Graph the free market equilibrium in the space below. Label the curves and show the values of ALL intercepts (show your work to find them). b. Now suppose that the Government decides to impose a $6 per-unit subsidy in this market. Calculate the price paid by...
4. Suppose the market for grass seed can be expressed as: Demand: Qd = 200 -...
4. Suppose the market for grass seed can be expressed as: Demand: Qd = 200 - 5P Supply: Qs = 40 + 5P If the government collects a $5 specific tax from sellers (here you can change the supply equation to Qs = 40 + 5(P-t) or Qs = 15+ 5P, How much will the quantity demanded change from the amount demanded before the tax? What price will consumers pay after the tax? What price will sellers receive after the...
The demand and supply conditions of market for beer are given by the following equations: Qd = 72 - P and Qs = -18 + P a) Find the initial equilibrium price and quantity. b) Calculate the consumer surplus and producer surplus for the equilibrium. c) Suppose that government impose a price floor at P=66 to control the consumption of beer. Is this policy effective? What are price and quantity consumed after this intervention of government? d) Going back to...
5. TAXES/SUBSIDIES, AND OTHER GOVERNMENT REGULATIONS 1. Consider the demand and supply for bubbly water in a market represented by the following equations: QD = 15 - 10P QS = 40P - 50 where Q is millions of bottles per year and P measures dollars per bottle. The equilibrium price of bubbly water is $1.30 per bottle and 2 million bottles are sold each year. (a) Calculate the price elasticity of demand and the price elasticity of supply at the...
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