ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- 15) PA P3 $ P₂ P₁ 0 FIGURE 18-3 OE D E: A 93 B 92 Quantity 9/₁1 Demand Refer to Figure 18-3. Suppose that supply is perfectly elastic and the price of this good is initially in equilibrium at P1. If an excise tax raises the price from P1 to P2, the excess burden of the tax is area 15) A) P3AP4. B) P1FBP2. C) P1CBP2. D) BFC. E) P2BP3.arrow_forwardSuppose a market has a downward sloping demand curve and a perfectly inelastic supply curve. The government wants to increase consumer surplus, which of the following policies could achieve this? O A minimum price A subsidy on purchases in the market A maximum price A tax on purchases in the market More than one of the abovearrow_forwardE5arrow_forward
- do fast.arrow_forwardAn economy only has two goods (A and B) which are produced. The goods are neither complements nor substitutes for one another. Good A has a perfectly inelastic supply curve and Good B has an upward sloping supply curve. Both goods have downward sloping demand curves. If the government wishes to implement a per unit subsidy S to increase total consumer surplus then what is the best policy? O Equal subsidy to both goods. Subsidies in proportion to the elasticities of demand for each good. Subsidise only Good A. Subsidise only Good B. Any of the above. No answer.arrow_forwardSuppose the market for a product is given by the following S+D functions. price 100 80 60 40 20 20 Demand 40 60 80 100 120 140 How much DWL does a $10 tax create? O a. zero Ob. 200 O c. 600 O d. 400 Supplyarrow_forward
- Let demand and supply be given by, Qd = 270 1P, Qs = -80 +9P. - If a tax is levied on consumers, price for the good. about half most none very little of the tax will be passed on to buyers in the form of a higherarrow_forwardPlease give me correct answer with full explanation and calculation; otherwise, i give downvotearrow_forwardProblem 3. Given that the farm gate price of product x is PHP 15.00/kg, Q1 is 350 kg and Q2 is 300 kg; a) what will be the tax revenue if buyer's price (with tax) is 20% higher than the the farm gate price? b) what is the value of the deadweight loss? Price PB Ps 0 *********** B В D Supply Demand Q2 Q₁ Quantityarrow_forward
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