Can you explain with graphs as well please i. The elasticity of demand for beer in country A is 1.8 and the elasticity ofdemand for beer in country B is 1.7. Suppose that the supply of beer isthe same in both countries and that both countries impose the same levelof tax on beer. Does the consumer in country A share more burden of tax?Suppose the demand curve for sugar is Q = 60-3P and the supply curveis Q=2P. Suppose the government announces a per-unit tax of 1 on theprice of sugar. What is the deadweight loss from the tax?Why do you think a policymaker and a consumer might interpret thisdeadweight loss differently?

The elasticity of demand refers to the responsiveness of quantity demanded to adjustments in price.…

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elasticity of demand

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

Can you explain with graphs as well please

i. The elasticity of demand for beer in country A is 1.8 and the elasticity of
demand for beer in country B is 1.7. Suppose that the supply of beer is
the same in both countries and that both countries impose the same level
of tax on beer. Does the consumer in country A share more burden of tax?
Suppose the demand curve for sugar is Q = 60-3P and the supply curve
is Q=2P. Suppose the government announces a per-unit tax of 1 on the
price of sugar. What is the deadweight loss from the tax?
Why do you think a policymaker and a consumer might interpret this
deadweight loss differently?

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Step 1: Define Elasticity of Demand

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Step 2: Explain the tax Burden on Consumers in Country A vs. Country B:

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Step 3: Explain the Deadweight Loss from Tax on Sugar

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Step 4: Explain the Different Interpretations of Deadweight Loss:

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