ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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You are Lori Lightfoot. The city needs money. You are contemplating 2 sources of revenue: levying a tax on gas in Chicago at $.50/ gal, and/or increasing the CTA fare $.25. The 2
Gas
(one way) (in millions)
$4.50 1 $2.00 6
4.00 1.1 1.75 8
3.50 1.2 1.50 10
3.00 1.3
Answer the following questions
Are the 2 demand
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- Due to a sales tax, the sale of gameboys decrease from 80 to 70. This tax is a tax on sellers when they receive the units from suppliers. How would the curve look due to this change?arrow_forward3) A government directly provides 20 units in a local market through an auction of surplus property. The METB is 0.2. The elasticity of demand is -4. Other pertinent information is provided in the figure. Calculate the changes in PS, CS, GS, and SS associated with the sale. S+20 S 10.0 9.5 D 50arrow_forward4. When the price of groundwater (water underground) increased from $1,525.5000 to $2,750.75000 per acre foot, the demand for pumps decreased from 575,950.7500 to 380,250.5000 units. a. Calculate the appropriate elasticity. b. Interpret the Elasticity c. How would you classify groundwater and pumps?arrow_forward
- Suppose that the Australian government imposes a sales tax on a product and both buyers and sellers share the burden of the If the price elasticity of demand for the product is perfectly inelastic. Which of the following is true? Select one: a. Sellers would pay more of the tax than buyers. b. Buyers would pay all of the tax. c. Buyers and sellers would share the tax burden equally. d. Sellers would pay all the tax.arrow_forwardSolve Question no. 1 . HAND WRITTEN SOLUTIONS ARE STRICTLY PROHIBITEDarrow_forward2. Hope, Arkansas (home of both ex-President Bill Clinton and former Presidential candidate Mike Huckabee), has a subway system, for which a one-way fare is $1.50. There is pressure on Governor Huckabee to reduce the fare by one-third, to $1.00. The Governor is dismayed, thinking that this will mean Hope is losing one-third of its revenue from sales of subway tickets. The Governor's economic advisor reminds him that he is focusing only on the price effect and ignoring the quantity effect. Explain why the Governor's estimate of a one-third loss of revenue is likely to be an overestimate using elasticity of demand.arrow_forward
- do fastarrow_forward(please don't use Ai solution) Using relevant examples from an economy or business that you are familiar with, discuss how the following economic concepts is useful to business managers and public sector representatives. a. Accurate data on the elasticity of demand for specific goods and services in an economy is important to the public sector representatives. Explain why and how this data can be used for decision making? Please include graphs and in text and referencingarrow_forwardthan high high minimum prices and taxation, what policies could be used to tackle binge drinking? 1. Other otherarrow_forward
- 49arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.arrow_forwardSuppose we instead tax the consumer rather than the driver. What happens in new equilibrium compared to when the driver pays the tax? A B Consumers pay more, cab owners earn more Consumers pay more, cab owners earn the same Consumers pay the same, cab owners earn the same Consumers pay less, cab owners pay the same Fare (per ride) Excise tax -$2 per ride $7.00 6.00 5.00 4.00 3.00 0 11 Supply curve shifts upword by the amount of the tax 6 d 8 S₂ 12 S₁ 10 14 Quantity of rides (millions per year)arrow_forward
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