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Tax Burden IL. GRAPH O SETTINGS Tax Burden Off Reset ($) Price Tax imposed on: Supply Demand 90 $90.00 Excise Tax (0 - $20) 0.00 80 70 Demand Relatively Elastic 60 Perfectly Inelastic Relatively Elastic 50 $50.00 40 Supply Perfectly Elastic Less 30 Elastic Perfectly Elastic 20 10 CALCULATIONS 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Quantity Price Paid (thousands per week) Quantity No Tax $50.00 4,000 With Tax $50.00 Instructions: Adjust the sliders so that the vertical intercept of the supply curve is $20 and the demand curve is perfectly inelastic. Click the Tax Burden switch above the graph to On. Make additional modifications to the interactive tool as indicated to answer the following questions. a) If there is no tax, the equilibrium price is $50. If a $15 tax paid on sellers is implemented, the buyer will pay $ burden of the tax (Click to select) and the b) Suppose the supply curve gradually changed to become more elastic with the original equilibrium remaining at (Q,P) = (4000, $50) and no change to the demand curve. Complete the following statements that describe the effects of this change in supply elasticity. i) The quantity bought and sold O does not change O decreases O decreases and then increases O increases and then decreases O increases ii) The government's revenue O decreases O decreases and then increases O does not change O increases O increases and then decreases iii) The consumers' share of the tax burden, measured as percentage of government's revenue derived from consumers, O does not change O increases O decreases O increases and then decreases O decreases and then increases iv) The producers' share of the tax burden, measured as percentage of government's revenue derived from producers, O decreases and then increases O does not change O increases O decreases O increases and then decreases

Tax Burden IL. GRAPH O SETTINGS Tax Burden Off Reset ($) Price Tax imposed on: Supply Demand 90 $90.00 Excise Tax (0 - $20) 0.00 80 70 Demand Relatively Elastic 60 Perfectly Inelastic Relatively Elastic 50 $50.00 40 Supply Perfectly Elastic Less 30 Elastic Perfectly Elastic 20 10 CALCULATIONS 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Quantity Price Paid (thousands per week) Quantity No Tax $50.00 4,000 With Tax $50.00 Instructions: Adjust the sliders so that the vertical intercept of the supply curve is $20 and the demand curve is perfectly inelastic. Click the Tax Burden switch above the graph to On. Make additional modifications to the interactive tool as indicated to answer the following questions. a) If there is no tax, the equilibrium price is $50. If a $15 tax paid on sellers is implemented, the buyer will pay $ burden of the tax (Click to select) and the b) Suppose the supply curve gradually changed to become more elastic with the original equilibrium remaining at (Q,P) = (4000, $50) and no change to the demand curve. Complete the following statements that describe the effects of this change in supply elasticity. i) The quantity bought and sold O does not change O decreases O decreases and then increases O increases and then decreases O increases ii) The government's revenue O decreases O decreases and then increases O does not change O increases O increases and then decreases iii) The consumers' share of the tax burden, measured as percentage of government's revenue derived from consumers, O does not change O increases O decreases O increases and then decreases O decreases and then increases iv) The producers' share of the tax burden, measured as percentage of government's revenue derived from producers, O decreases and then increases O does not change O increases O decreases O increases and then decreases

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 10PA
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Refer to the interactive below: Tax Burden II. GRAPH O SETTINGS Tax Burden Off Reset ($) Price Tax imposed on: Supply Demand 90 $90.00 Excise Tax (0 - $20) 0.00 80 70 Demand 60 Perfectly Relatively Inelastic Elastic Relatively Elastic 50 $50.00 40 Supply Less Perfectly 30 Elastic Elastic Perfectly Elastic 20 D 10 CALCULATIONS 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Quantity (thousands per week) Price Paid Quantity No Tax $50.00 4,000 With Tax $50.00 Instructions: Adjust the sliders so that the vertical intercept of the supply curve is $20 and the demand curve is perfectly inelastic. Click the Tax Burden switch above the graph to On. Make additional modifications to the interactive tool as indicated to answer the following questions. a) If there is no tax, the equilibrium price is $50. If a $15 tax paid on sellers is implemented, the buyer will pay $ burden of the tax (Click to select) and the b) Suppose the supply curve gradually changed to become more elastic with the original equilibrium remaining at (Q,P) = (4000, $50) and no change to the demand curve. Complete the following statements that describe the effects of this change in supply elasticity. i) The quantity bought and sold O does not change O decreases O decreases and then increases O increases and then decreases O increases ii) The government's revenue O decreases O decreases and then increases O does not change O increases O increases and then decreases iii) The consumers' share of the tax burden, measured as percentage of government's revenue derived from consumers, O does not change O increases O decreases O increases and then decreases O decreases and then increases iv) The producers' share of the tax burden, measured as percentage of government's revenue derived from producers, O decreases and then increases O does not change O increases O decreases O increases and then decreases
Transcribed Image Text:Refer to the interactive below: Tax Burden II. GRAPH O SETTINGS Tax Burden Off Reset ($) Price Tax imposed on: Supply Demand 90 $90.00 Excise Tax (0 - $20) 0.00 80 70 Demand 60 Perfectly Relatively Inelastic Elastic Relatively Elastic 50 $50.00 40 Supply Less Perfectly 30 Elastic Elastic Perfectly Elastic 20 D 10 CALCULATIONS 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 Quantity (thousands per week) Price Paid Quantity No Tax $50.00 4,000 With Tax $50.00 Instructions: Adjust the sliders so that the vertical intercept of the supply curve is $20 and the demand curve is perfectly inelastic. Click the Tax Burden switch above the graph to On. Make additional modifications to the interactive tool as indicated to answer the following questions. a) If there is no tax, the equilibrium price is $50. If a $15 tax paid on sellers is implemented, the buyer will pay $ burden of the tax (Click to select) and the b) Suppose the supply curve gradually changed to become more elastic with the original equilibrium remaining at (Q,P) = (4000, $50) and no change to the demand curve. Complete the following statements that describe the effects of this change in supply elasticity. i) The quantity bought and sold O does not change O decreases O decreases and then increases O increases and then decreases O increases ii) The government's revenue O decreases O decreases and then increases O does not change O increases O increases and then decreases iii) The consumers' share of the tax burden, measured as percentage of government's revenue derived from consumers, O does not change O increases O decreases O increases and then decreases O decreases and then increases iv) The producers' share of the tax burden, measured as percentage of government's revenue derived from producers, O decreases and then increases O does not change O increases O decreases O increases and then decreases
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