100 90 80 Supply 70 60 Tax Wel 42, 46.8 50 40 30 20 10 Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Pairs of shoes) 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 Price Sellers Receive (Pairs of shoes) (Dollars per pair) (Dollars per pair) Before Tax 0.00 After Tax 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 Buyers Sellers The burden of the tax falls more heavily on the elastic side of the market. PRICE (Dollars per pair)
100 90 80 Supply 70 60 Tax Wel 42, 46.8 50 40 30 20 10 Demand 10 20 30 40 50 60 70 80 90 100 QUANTITY (Pairs of shoes) 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 Price Sellers Receive (Pairs of shoes) (Dollars per pair) (Dollars per pair) Before Tax 0.00 After Tax 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 Buyers Sellers The burden of the tax falls more heavily on the elastic side of the market. PRICE (Dollars per pair)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:**Graph Analysis**
The graph illustrates the supply and demand curves for shoes, with price (in dollars per pair) on the vertical axis and quantity (in pairs of shoes) on the horizontal axis.
- **Supply Curve**: Upward sloping, showing a positive relationship between price and quantity supplied.
- **Demand Curve**: Downward sloping, indicating an inverse relationship between price and quantity demanded.
The intersection of the supply and demand curves indicates the equilibrium point, labeled with the coordinates (42, 46.8), representing an equilibrium price of $46.8 per pair and a quantity of 42 pairs sold.
A tax wedge is shown as a gap between the supply and demand curves at the new equilibriums, highlighting the impact of a tax.
**Table to Fill Out**
1. **Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax.**
| Quantity (Pairs of shoes) | Price Buyers Pay (Dollars per pair) | Price Sellers Receive (Dollars per pair) |
|-----------------------------|--------------------------------------|-------------------------------------------|
| Before Tax | | 0.00 |
| After Tax | | |
2. **Using the data you entered in the previous table, calculate the tax burden that falls on buyers and 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 |
|-------------------------------|------------|
| Buyers | |
| Sellers | |
**Conclusion**
- The burden of the tax falls more heavily on the ______ elastic side of the market.
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