Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 8, Problem 5SPPA
To determine
To compute:
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Price (dollars per tire)
S + tax
70
60
50
40
D
30
20
10
10 20 30 40 50 60 70
Quantity (millions of tires per month)
The figure above shows the market for tires. The government has imposed a tax on
of the tax.
tires, and the buyers pay
A) $50
B) $60
C) $20
D) $10
The following is a Table that contains the demand and supply schedules of chocolate
ice-creams.
Price
(cents per ice-cream)
$0.90
0.80
0.70
0.60
0.50
0.40
Quantity Demanded
(millions per day)
1
asifWNH
2
3
4
5
6
Quantity Supplied
(millions per day)
7
6
10 10
5
4
3
2
a) If there is no tax on ice-creams, what is their price and how many are produced
and consumed?
b) If a tax of $0.20 cents is imposed on every ice-cream consumed, what happens to
the price of an ice-cream and the number produced and consumed? Illustrate the
effects of this policy on the market for chocolate ice-creams.
c) How much tax does the government collect and who pays it?
Suppose that the government imposes a tax on eigarettes.
Use the diagram below to answer the questions. Dis the
demand curve before tax, S is the supply curve before tax and
Sis the supply curve after the tax
Price
18
12
10
10 12
Qua
(a) For the market for cigarettes without the tax indicate:
(0)
Price paid by consumers
(8)
Price paid by producers
()
Quantity of cigarettes sold
(w)
Buyer's reservation price
Chapter 8 Solutions
Foundations of Economics (8th Edition)
Ch. 8 - Prob. 1SPPACh. 8 - Prob. 2SPPACh. 8 - Prob. 3SPPACh. 8 - Prob. 4SPPACh. 8 - Prob. 5SPPACh. 8 - Prob. 6SPPACh. 8 - Prob. 7SPPACh. 8 - Prob. 8SPPACh. 8 - Prob. 9SPPACh. 8 - Prob. 10SPPA
Ch. 8 - Prob. 1IAPACh. 8 - Prob. 2IAPACh. 8 - Prob. 3IAPACh. 8 - Prob. 4IAPACh. 8 - Prob. 5IAPACh. 8 - Prob. 6IAPACh. 8 - Prob. 7IAPACh. 8 - Prob. 8IAPACh. 8 - Prob. 9IAPACh. 8 - Prob. 10IAPACh. 8 - Prob. 1MCQCh. 8 - Prob. 2MCQCh. 8 - Prob. 3MCQCh. 8 - Prob. 4MCQCh. 8 - Prob. 5MCQCh. 8 - Prob. 6MCQCh. 8 - Prob. 7MCQCh. 8 - Prob. 8MCQ
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