In an effort to curb the use of cigarettes, the US has utilized taxes to inhibit the purchase of them to help the population’s health. The price for cigarettes without a tax would be $2.50/pack. In that market, 950M cigarette packs would be the quantity sold each year. The government has inserted $2.00 tax/pack of cigarette. This tax reduces the amount of quantity demand to 600M cigarettes and the $2 tax is burdened 25% by the producer and 75% by the consumer. Please illustrate a supply and demand chart that indicates the areas of consumer surplus, tax revenue, deadweight loss, and producer surpluses with both quantities shown

The government's policy goal is to reduce sugar consumption since consuming a lot of sugar is linked with negative health outcomes such as diabetes and hearth disease. In order to discourage consumers from consuming sugary soft drinks, the government is considering placing a sales tax on soda. Government economists have estimated the price elasticity of demand is -2.Which of the following statements is true? a.The tax on sugary soft drinks will likely decrease the demand for sugar-free soft drinks. b.Since consumers' demand for sugary soft drinks is elastic, the tax on sugary soft drinks will likely raise considerable revenue but likely will not reduce the consumption of sugary soft drinks by consumers. c.Since consumers' demand for sugary soft drinks is elastic, the tax will likely work to discourage sugary soft drink consumption. d.Taxes do not discourage consumers from consuming products.

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Suppose households supply 500 billion hours of labor per year and have a tax elasticity of supply of 0.16. If the tax rate is increased by 19.6 percent, by how many hours will the supply of labor decline? a) 28.67 billion b) 1.568 trillion c) 2.465 trillion  d) 3.422 trillion  e) 9.183 trillion

The concept of elasticity is used to     Analyze how much the economy can expand     Determine the level of government invention in the economy     Analyze supply and demand with greater precision     Calculate consumer credit purchases     The increase in demand that will occur from a change in one of the nonprice determinants of demand

Suppose that a city government introduces a $0.50 excise (commodity) tax on consumers of bottles of soda to improve the health of its citizens. Manipulate the accompanying graph to demonstrate the impact of the tax on the market for soda Market for Bottles of Soda 5.0 4.5 4.0 What would be the new equilibrium quantity if instead of taxing consumers, the city taxed producers? 3.5 3.0 2.5 thousand bottle:s 2.0 0.5 0.0 0 2 34 Quantity (thousands of bottles) 5 8 9 10

Minnesota and Tennessee, among other states, have recently begun to tax the sales of healthcare providers, such as hospitals and physicians. Analyze the incidence of this sales tax for three different scenarios: (a) The demand for medical services is completely inelastic while the supply curve is positively sloped to the right. (b) The demand curve is downward sloping and supply is completely inelastic (for this case, it is best to shift the demand curve downward by the amount of the per-unit tax). (c) The demand curve is downward sloping and the supply curve is positively sloped. (d) When does the consumer or health care provider pay a larger portion of the tax? (e) Why?

Price $3.50 3 2.50 $0.25 $1.00 1,200 1,500 $0.50 Supply The figure above illustrates a market for gasoline with a $1 tax imposed on the buyers. What is the seller's tax incidence? Between $0.00 and $1.00 depending on elasticity of supply. Demand Demand + $1 tax Quantity

The government would collect??? Million tax per day.

suppose that the local government of Columbus decides to institute a tax on seltzer consumers. Before the tax, 20,000 packs of seltzer were sold every week at a price of $10 per pack. After the tax, 15,000 packs of seltzer are sold every week; consumers pay $12 per pack (including the tax), and proceeds nrecieve $5 per pack.