Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 10, Problem 12P
(a)
To determine
(b)
To determine
Price paid after tax.
(c)
To determine
Consumer surplus, producer surplus, government revenue, social surplus, and
(d)
To determine
The argument in support of tax.
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Chapter 10 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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Similar questions
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- The graph shows the demand and supply of bungee jumps in Xtremeland. The government decides to impose an 200 Supply 180 excise tax on bungee jumps to help pay for the high 160 number of back and neck injuries. 140 120- 100- 80 60- 40 Demand 20- 50,000 0 10,000 30,000 70,000 Quantity of bungee jumps What would the government's tax revenue be if it imposes a tax of $80 on each jump? What would the government's tax revenue be if it imposes a tax of $40 on each jump? What would the government's tax revenue be if it imposes a tax of $120 on each jump? Price of bungee jumps (S)arrow_forwardUsing a graph, discuss how the elasticity of demand influences the incidence of a taxarrow_forwardHow does a tax on a good affect the price paid by buyers, price receive by sellers, and the quantity sold?arrow_forward
- 1. Suppose that the government imposes a tax on cigarettes. Use the diagram in the photo below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and St is the supply curve after tax. a. Calculate the consumer surplus after the tax b. Calculate the producer surplus after the tax c. Calculate the following: Tax revenue Deadweight loss Total surplus after taxarrow_forwardWhat is producer and consumer surplus PRIOR to tax?arrow_forwardHow can the government improve tax collections without imposing much tax to the consumer?arrow_forward
- The following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. How much will buyers pay for a bus ticket after the tax is imposed? $4.50 $6 $5.50 $5arrow_forwardWould consumer or producer carry the burden of tax if good is inelastic? Show on a grapharrow_forwardAt the current market equilibrium, price is $17 and quantity is 50. A tax of 25% is imposed, after which the price paid by consumers including the tax is $20 and the new equilibrium quantity is 40. Sketch a figure illustrating the equilibrium before and after the tax. Calculate tax revenue, the producer burden, the consumer burden, and the excess burden. Label each.arrow_forward
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