The following graph shows the effect of a tax imposed on soft drinks. Use this graph to
Question:
a. Which areas in the graph represent the excess burden (deadweight loss) of the tax?
b. Which areas represent the revenues collected by the government from the tax?
c. Would this tax on soft drinks be considered efficient? Briefly explain.
Transcribed Image Text:
S2 Price S, Amount of the tax P2 CI D P, Н Quantity Q2 Q,
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 75% (12 reviews)
a The sum of areas D and G represent the excess burden deadweight loss ...View the full answer
Answered By
Joseph Njoroge
I am a professional tutor with more than six years of experience. I have helped thousands of students to achieve their academic goals. My primary objectives as a tutor is to ensure that students do not have problems while tackling their academic problems.
4.90+
10+ Reviews
27+ Question Solved
Related Book For
Question Posted:
Students also viewed these Micro Economics questions
-
The following graph shows the equilibrium price and quantity in the market for chewing gum in the country Argonia. Suppose the government of Argonia passes a bill to impose a tax of $2 on the...
-
The following graph shows the demand curve (D) of a home country facing the foreign monopoly supplier of a good to the home country, the associated marginal revenue curve (MR), the foreign firms...
-
The following graph shows the cost curves for a perfectly competitive firm. Identify the shutdown point, the breakeven point, and the firm's short-run supply curve. MC ATC AVC
-
Use the graph of f to solve Exercises 924. Where applicable, use interval notation. Find the x-intercept(s). y = f(x) # [TD y X
-
(Postretirement Benefit Worksheet) Hollenbeck Foods Inc. sponsors a postretirement medical and dental benefit plan for its employees. The following balances relate to this plan on January 1, 2010....
-
Find the Laplace transform of the following signals and locate the poles and zeros of \(F(s)\). (a) \(f(t)=-8 u(t)\). (b) \(f(t)=0.5 t u(t)\). (c) \(f(t)=10 e^{-20000 t} u(t)\).
-
Between z = 1.55 and z = 1.04 Find the indicated area under the standard normal curve. If convenient, use technology to find the area.
-
Based on your review of the Exhibits (1 and 2), audit memos (G 3 and G 4), complete audit schedules G 5, G 6, and G 7.
-
(20 points) For each of the histories below, state whether it is (a) sequentially consistent, (b) linearizable. Justify your answer. All variables are initially zero. Concurrent History H1 P1 [...
-
There are 2 shinobis with chakra levels 5 and 10 respectively and the desired sum of chakra levels is utmost 15 Starting with ke0, suy of chakra levels after attack max(5-0,0) + max(10- 0,0) 5+10 15....
-
Suppose the current equilibrium price of a quarter-pound hamburger is $5, and 10 million quarter-pound hamburgers are sold per month. After the federal government imposes a tax of $0.50 per...
-
Use the following graph of the market for cigarettes to answer the questions. a. According to the graph, how much is the government tax on cigarettes? b. What price do producers receive after paying...
-
A tank is shot at by 3 independently acting anti-tank helicopters with one antitank missile each. Each missile hits the tank with probability 0.6 . If the tank is hit by 1 missile, it is put out of...
-
2. Suppose the 10-year T-bonds are currently yielding 5.8%. You are also given the following information about economic activity and ABC Corporation bonds: - Inflation premium = 3.25% Liquidity...
-
General Hospital has variable costs of 90% of total revenues and total fixed costs of $50 million per year. There are 50,000 patient-days estimated for next year. What is the average daily revenue...
-
6. Let C be the path of a moving particle with position vector(t) = (2t, t, 4t). Find the curvature function. (You do not need to simplify your answer.) What happens to the curvature of C as too?...
-
Let f(x)=4x-1, h(x)=x-4 Find (fof)(-3). (ff)( -3)=
-
The manager at Marilyn's Sewing Service reported $75,000 total conversion cost and 41,500 total conversion cost in equivalent units. Compute the conversion cost per equivalent unit. The accounting...
-
Snow Spray Corp. (SSC) recently filed for bankruptcy protection. The company manufactures downhill skis and reports under ASPE. With the increased popularity of such alternative winter sports as...
-
You are planning to purchase your first home five years from today. The required down payment will be $50,000. You currently have $20,000. but you plan to contribute $500 each quarter to a special...
-
Companies that produce toilet paper bleach the paper to make it white. Some paper plants discharge the bleach into rivers and lakes, causing substantial environmental damage. Suppose the following...
-
The graph on the next page illustrates the situation in the dry cleaning market, assuming that the marginal social cost of the pollution increases as the quantity of items cleaned per week increases....
-
Eric Finklestein, an economist at Duke University, has argued that the external costs from being obese are larger than the external costs from smoking because "the mortality effect for obesity is...
-
Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Submit Date March 1 March 5 March 9 March 18 March 25 March 29...
-
Wilmington Company has two manufacturing departments-Assembly and Fabrication. It considers all of its manufacturing overhead costs to be fixed costs. The first set of data that is shown below is...
-
What are the fundamental differences between preemptive and cooperative multitasking in an operating system, and in which scenarios would each be most effective ?
Study smarter with the SolutionInn App