Figure: An Excise Tax Price of good $5.00 4.33 3.50 3.00 2.40 1.40 0.60 0 100 225 300 Reference: Ref 7-4 D 750 Quantity (Figure: An Excise Tax) Look at the figure An Excise Tax. If an excise tax equal to $1.10 is imposed on the supply of this good, then the price received by sellers will: A) decrease by $0.60. B) increase by $0.50. C) not decrease. D) decrease by $1.10.

Figure: An Excise Tax Price of good $5.00 4.33 3.50 3.00 2.40 1.40 0.60 0 100 225 300 Reference: Ref 7-4 D 750 Quantity (Figure: An Excise Tax) Look at the figure An Excise Tax. If an excise tax equal to $1.10 is imposed on the supply of this good, then the price received by sellers will: A) decrease by $0.60. B) increase by $0.50. C) not decrease. D) decrease by $1.10.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The vertical distance between points A and B represents a tax in the market. 12 11 10 210 A Supply 9 PRICE 65 4 3 B 10 2 1 MNr Demand + 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 QUANTITY Refer to Figure. The imposition of the tax causes the price paid by buyers to O decrease by $2. O increase by $3. O decrease by $4, O increase by $5.
QUESTION 18 Exhibit 19-6 Price of Good X 0 Quantity of Good X Refer to Exhibit 19-6. Suppose the three equilibrium quantities are 700, 800, and 900, and the two equilibrium prices are $2.20 and $2.75. What is the tax revenue collected from the tax that shifted S 1 to S 2 when D 1 is the relevant demand curve? a. $440 Ob. $600 O c. $900 Od. $800
2. Draw a supply and demand curve and show the equilibrium price and quantity. Explain graphically in the same diagram what happens to the equilibrium price and quantity if there is an expectation of higher future prices of the product and there is an increase in taxation of the product in the economy?
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Figure 4-5. The graph shows the impact of an excise tax. Price $2.00 1.50 1.00 .50 B A M E H K I 350 F 500 Quantity tax G Stax $1.00 for consumers and $0.50 for producers $1.00 for consumers and $1.00 for producers. $0.25 for consumers and $0.75 for producers. $0.50 for consumers and $0.50 for producers. S DSR Refer to Figure 4-5. The amount of the actual tax burden paid by consumers and producers is
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
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
Question 29 When a excise tax is placed on the seller of a good: a the buyer is likely to pay a higher price and the seller is likely to receive a lower price from the sale of the good once the tax is considered. b the buyer is likely to pay a higher price and the seller is likely to receive the original price from the sale of the good once the tax is considered. c the buyer is likely to pay the original price and the seller is likely to receive a lower price from the sale of the good once the tax is considered. d the seller is likely to receive a higher price from the sale and the buyer is likely to pay a lower price for the good once the tax is considered.
9. When a sales tax is imposed on sellers, we can imagine a hypothetical supply curve shifted to the left such that the vertical distance between the original supply curve and the new (supply + tax) curve equals the sales tax divided by the price elasticity of demand. sales tax multiplied by the price elasticity of demand. sales tax multiplied by the price elasticity of supply. amount of the sales tax.
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