Homework Answers
Option (B).
After tax quantity = Tax revenue / Unit tax = $750 / $5 = 150
Decrease in quantity = 200 - 150 = 50
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Suppose the equilibrium quantity of widgets sold is 200 when there is no tax. Then a tax of $5 per widget is imposed....
1-3 please Feel free to use any spaces for scratch work. 1) Consider the excise tax lectured in class. For a given e...
1-3
please
Feel free to use any spaces for scratch work. 1) Consider the excise tax lectured in class. For a given excise tax, we can correctly predict that consumer tax incidence will be less than producer tax incidence when: a) Both the demand and the supply curves are more inelastic. b) The demand curve is inelastic and the supply curve is elastie. c) The demand curve is elastic and the supply curve is inelastic. d) Both the demand and...
2) Chile is an importer of computer chips, taking the world price of $12 per chip...
2)
Chile is an importer of computer chips, taking the world price
of $12 per chip as given. Suppose Chile imposes a $7 tariff on
chips. Which of the following outcomes is possible?
A.
The price of chips in Chile increases to $16; the quantity of
Chilean-produced chips increases; and the quantity of chips
imported by Chile decreases.
B.
The price of chips in Chile increases to $19; the quantity of
Chilean-produced chips increases; and the quantity of chips
imported...
Break-Even Point Analysis J Widget Corporation buys completed Widgets from Widget manufacturers and sells them to...
Break-Even Point Analysis J Widget Corporation buys completed Widgets from Widget manufacturers and sells them to the public through a catalog. Currently J Widget Corporation purchases Widgets from 2 vendors. Total fixed cost for last year was $1,200,000. Vendor X. Per unit price if Description Widget Quantity 0- 50 $3.60 Quantity 51-100 $3.40 Vendor Y: Per unit price if Description Widget Quantity 0-50 $4.00 Quantity 51-100 $3.00 Last year J Widget sold 500,000 widgets at a cost of $4.50 per...
Suppose the market for widgets can be described by the following equations: Demand: P = 10...
Suppose the market for widgets can be described by the following equations: Demand: P = 10 – Q Supply: P = Q – 4 where P is the price in dollars per unit and Q is the quantity. What is the equilibrium price and quantity? Suppose the government imposes a tax of $1 per unit to reduce widget consumption and raise government revenues. What will the new equilibrium quantity be? What price will the buyer pay? What price will the...
Suppose the market for widgets can be described by the following equations: Demand: P = 20...
Suppose the market for widgets can be described by the following equations: Demand: P = 20 - 1.000 Supply: P = 1.000 -6, where P is the price in dollars per unit and Q is the quantity in thousands of units. What is the equilibrium price and quantity? The equilibrium quantity is thousand units and the equilibrium price is $(Enter your responses rounded to two decimal places.) Suppose the government imposes a tax of $1 per unit to reduce widget...
3. Suppose the market for widgets can be described by the following equations: Demand: P= 10 - Q Supply: P=Q-4 where P...
3. Suppose the market for widgets can be described by the following equations: Demand: P= 10 - Q Supply: P=Q-4 where P is the price in dollars per unit and Q is the quantity in thousands of units. a. What is the equilibrium price and quantity? (2 points) b. Suppose the government imposes a tax of $1 per unit to reduce widget consumption and raise government revenues. What will the new equilibrium quantity be? What price will the buyer pay?...
Question 24 The equilibrium quantity in the market for Apple watches has been 750 per month....
Question 24 The equilibrium quantity in the market for Apple watches has been 750 per month. Then a tax of $7 per watch is imposed. The price paid by buyers increases by $5.50 and the after-tax price received by sellers falls by $1.50. The government is able to raise $4480 per month in revenue from the tax. a) What is the deadweight loss from the tax? a. $500 b. $385 C. $270 d. $400 b) Which is more elastic -...
Government-imposed taxes cause reductions in the activity that is being taxed
11. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for vodka. With no tax, the equilibrium quantity is 60 bottles. The following table shows the equilibrium quantity produced and sold in the market for various per unit taxes.Tax(Dollars per bottle)Quantity(Bottles)060204840365030602480121000 Suppose the government imposes a $20-per-bottle tax on suppliers. At this tax amount, the equilibrium quantity of vodka is...
The market for cigarettes is equilibrium at p=$6 and quantity of 200 (million of packs per...
The market for cigarettes is equilibrium at p=$6 and quantity
of 200 (million of packs per day). Suppose a $2/pack tax is imposed
that causes equilibrium quantity to go down to 150 (million of
packs per day).
Calculate the tax incidence i.e. share of the tax paid by
consumers & producers
Calculate the consumer surplus before and after the tax
Calculate the deadweight loss of the tax
Calculate the tax revenue of the tax
Price/ pack $7.50 $6 $5.50
Suppose that Acme Widget Co. can produce 100 widgets a week. To produce this many widgets,...
Suppose that Acme Widget Co. can produce 100 widgets a week. To produce this many widgets, the company needs $100 worth of wood. $50 worth of plastic and $30 worth of other materials. It also needs to hire two workers and pay them $75 each. To help in production, the company leases a widget making machine for $80 per week. Mr. Acme needs to be working at the factory each day, as well. He could have worked for Beta Zerc...
1-3
please
Feel free to use any spaces for scratch work. 1) Consider the excise tax lectured in class. For a given excise tax, we can correctly predict that consumer tax incidence will be less than producer tax incidence when: a) Both the demand and the supply curves are more inelastic. b) The demand curve is inelastic and the supply curve is elastie. c) The demand curve is elastic and the supply curve is inelastic. d) Both the demand and...
2)
Chile is an importer of computer chips, taking the world price
of $12 per chip as given. Suppose Chile imposes a $7 tariff on
chips. Which of the following outcomes is possible?
A.
The price of chips in Chile increases to $16; the quantity of
Chilean-produced chips increases; and the quantity of chips
imported by Chile decreases.
B.
The price of chips in Chile increases to $19; the quantity of
Chilean-produced chips increases; and the quantity of chips
imported...
Break-Even Point Analysis J Widget Corporation buys completed Widgets from Widget manufacturers and sells them to the public through a catalog. Currently J Widget Corporation purchases Widgets from 2 vendors. Total fixed cost for last year was $1,200,000. Vendor X. Per unit price if Description Widget Quantity 0- 50 $3.60 Quantity 51-100 $3.40 Vendor Y: Per unit price if Description Widget Quantity 0-50 $4.00 Quantity 51-100 $3.00 Last year J Widget sold 500,000 widgets at a cost of $4.50 per...
Suppose the market for widgets can be described by the following equations: Demand: P = 20 - 1.000 Supply: P = 1.000 -6, where P is the price in dollars per unit and Q is the quantity in thousands of units. What is the equilibrium price and quantity? The equilibrium quantity is thousand units and the equilibrium price is $(Enter your responses rounded to two decimal places.) Suppose the government imposes a tax of $1 per unit to reduce widget...
3. Suppose the market for widgets can be described by the following equations: Demand: P= 10 - Q Supply: P=Q-4 where P is the price in dollars per unit and Q is the quantity in thousands of units. a. What is the equilibrium price and quantity? (2 points) b. Suppose the government imposes a tax of $1 per unit to reduce widget consumption and raise government revenues. What will the new equilibrium quantity be? What price will the buyer pay?...
Question 24 The equilibrium quantity in the market for Apple watches has been 750 per month. Then a tax of $7 per watch is imposed. The price paid by buyers increases by $5.50 and the after-tax price received by sellers falls by $1.50. The government is able to raise $4480 per month in revenue from the tax. a) What is the deadweight loss from the tax? a. $500 b. $385 C. $270 d. $400 b) Which is more elastic -...
The market for cigarettes is equilibrium at p=$6 and quantity
of 200 (million of packs per day). Suppose a $2/pack tax is imposed
that causes equilibrium quantity to go down to 150 (million of
packs per day).
Calculate the tax incidence i.e. share of the tax paid by
consumers & producers
Calculate the consumer surplus before and after the tax
Calculate the deadweight loss of the tax
Calculate the tax revenue of the tax
Price/ pack $7.50 $6 $5.50
Suppose that Acme Widget Co. can produce 100 widgets a week. To produce this many widgets, the company needs $100 worth of wood. $50 worth of plastic and $30 worth of other materials. It also needs to hire two workers and pay them $75 each. To help in production, the company leases a widget making machine for $80 per week. Mr. Acme needs to be working at the factory each day, as well. He could have worked for Beta Zerc...
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