5. Calculating tax incidence Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 3,000 cases of beer are sold every week; consumers pay $7 per case (including the tax), and producers receive $2 per case. The amount of the tax on a case of beer is S that falls on producers is $ per case. True per case. Of this amount, the burden that falls on consumers is $ True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. False per case, and the burden.

5. Calculating tax incidence Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 3,000 cases of beer are sold every week; consumers pay $7 per case (including the tax), and producers receive $2 per case. The amount of the tax on a case of beer is S that falls on producers is $ per case. True per case. Of this amount, the burden that falls on consumers is $ True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. False per case, and the burden.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 50 billion cases of cola were sold every year at a price of $6 per case. After the tax, 45 billion cases of cola are sold every year; consumers pay $8 per case (including the tax), and producers receive $5 per case. The amount of the tax on a case of cola is $ the burden that falls on producers is $ True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. True per case. Of this amount, the burden that falls on consumers is $ per case. False per case, and
9. Effect of a tax on buyers and sellers The following graph shows the daily market for shoes when the tax on sellers is set at $0 per pair. Suppose the government institutes a tax of $23.20 per pair, to be paid by the seller. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Hint: To see the impact of the tax, first enter the value of the tax in the Tax on Sellers field. Adjust the value in the price field to move the green line to the after-tax equilibrium so that quantity demanded equals quantity supplied. Graph Input Tool Market for Shoes 200 180 I Price (Dollars per pair) $100 160 Quantity Demanded (Pairs of shoes) Quantity Supplied (Pairs of shoes) Supply 250.00 250.00 140 120 100 Supply Shifter 80 Demand Tax on Sellers (Dollars per pair) 60 0.00 40 20 50 100 150 200 250…
5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40 billion cases of cola were sold every year at a price of $7 per case. After the tax, 34 billion cases of cola are sold every year; consumers pay $8 per case (induding the tax), and producers receive $4 per case. per case, and the The amount of the tax on a case of cola isS per case. Of this amount, the burden that falls on consumers is S burden that falls on producers is s per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers. O True O False
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5. Calculating tax incidence Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 10,000 cases of cola were sold every week at a price of $4 per case. After the tax, 4,000 cases of cola are sold every week; consumers pay $7 per case, and producers receive $1 per case (after paying the tax).
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 5,000 cases of beer are sold every week; consumers pay $6 per case, and producers receive $3 per case (after paying the tax), The amount of the tax on a case of beer is S burden that falls on producers is True per case. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. O False per case. Of this amount, the burden that falls on consumers is 5 per case, and the
Kel ng Time: * Question Completion Status: The vertical distance between points and represents a tax in the market. PRICE 12 10 9 8 CO 76 5 inutes, 37 seconds. 4 3 2 1 A B Supply Demand +++ H 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6) QUANTITY Refer to Figure 8-2. The amount of tax revenue received by the government is a. $2.50. b. $9. c. $4. d. $5. A Moving to another question will save this response. Mac
5. Calculating tax incidence Suppose that the local government of Ogden decides to institute a tax on soda consumers. Before the tax, 20,000 liters of soda were sold every week at a price of $10 per liter. After the tax, 13,000 liters of soda are sold every week; consumers pay $14 per liter (including the tax), and producers receive $7 per liter. The amount of the tax on a liter of soda is S that falls on producers is 5 per liter O True per liter. Of this amount, the burden that falls on consumers is 3 True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. O False per liter, and the burden
7. Effect of a tax on buyers and sellers The following graph shows the daily market for shoes. Suppose the government institutes a tax of $23.20 per pair. This places a wedge between the price buyers pay and the price sellers receive. PRICE (Dolars per pair) 100 90 0 0 Before Tax After Tax 100 200 Buyers Sellers W 420, 70 Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax Quantity Price Buyers Pay (Pairs of shoes) (Dollars per pair) Price Sellers Receive (Dollars per pair) Supply Derrand 400 500 600 300 000 600 QUANTITY(as of show) Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per pair) Elasticity The burden of the tax falls more heavily on the eastic side of the…
a. $7 b. $3 c. Between $5 and $7 d. Between $3 and $5 7 PRICE EL 3 60 100 fer to Figure 6-11. Suppose a tax of $2 per unit is imposed on this market. How much will buyers pay per unit after the tax is posed? QUANTITY