Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 20, Problem 5RQ
To determine
Impact of the excise tax on the society.
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Figure: Commodity Tax
Price
$2.25
1.75
1.50
0
100 200
325
400
D₂ D₁
Quantity
If a $0.75 tax is imposed on sellers of candy bars, the new equilibrium is:
O 325 candy bars at $2.25 each.
325 candy bars at $1.50 each.
325 candy bars at $1.75 each.
400 candy bars at $2.25 each.
>
D Question 4
Price (dollars per widget)
a
O
8
4
N
10
$6.
S
O
between $8 and $6.
more than or equal to $8.
less than $6.
1 pts
20
30 40 50
60
Quantity (millions of widgets per year)
In the figure above, if a tax of $2 per widget is
imposed on sellers, then the after-tax amount
per widget received by the seller will be
Question 5:
Combined state and federal taxes on gasoline average around 50 cents per gallon, and these taxes are statutorily levied on gasoline sellers. Because
the demand for gasoline is relatively inelastic compared to the supply of gasoline:
buyers likely do not bear much of the actual burden because it is statutorily levied on sellers who must submit the tax payments.
sellers likely bear most of the actual burden of the tax through lower gasoline prices.
O the net price received by sellers after they pay taxes likely falls by almost the full amount of the tax.
O buyers likely bear most of the actual burden of the tax through higher gasoline prices.
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- Imagine that the demand curve for beer is given by P=9-Q and supply for beer is given by P=1+Q. What is the deadweight loss associated with a tax of $3 per unit? 12 O 2.25 O None of the above. O 6.25arrow_forwardSuppose the demand for a product is given by P = 30-3Q. Also, the supply is given by P = 10 + Q. If a $4 per-unit excise tax is levied on the buyers of a good, the deadweight loss created by this tax will be $4 $16 None of these $24 O $8 Question 5 Suppose the demand for a product is given by P = 30 - 2Q. Also, the supply is given by P = 5 + 3Q. If a $5 per-unit excise tax is levied on the buyers of a good, after the tax, consumer surplus is equal to O None of these $16 $25 $24 1 pts $2.50arrow_forwardPrice (per latte) $4.50 S 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0 200 600 1,000 1,400 1,800 Quantity of lattes (in cups) If an excise tax of $2.25 is assessed on each latte, government revenue will be: O $1.800 O $225 O $450 O $400arrow_forward
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