1 m A B SIDE 1 m m 27 CD BCDE 63 1 2 0 CDE 8 1 1 2 1 1 5 4 6 ) 64 ABCD 82 1 2 7 - 5.00 4.50 Price (dollars per movie 4.00 3.50 3.00 2.50 2.00 1.50 1.00 ooooor .50 2 3 4 5 6 7 8 9 10 1 1 12 Quantity (movies rented per hour) 18) The above figure shows the demand curve for movie rentals from Vudu. Vudu decreased its price from $4 to $3. Calculate the price elasticity of demand at the initial price. A) 2/3 B) 3 / 2 . C) 1 / 4. D) 4 Use this diagram to answer the questions 19 - 25. $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 0 5 10 15 20 25 30 35 40 45 50 55 60 (Questions 19-25) Without any taxes, the market equilibrium price for a ticket is $3.5, and the equilibrium quantity is 30 units. Now, let's suppose a regulator imposes an excise tax of $3 per ticket. 19) What price do buyers pay after the introduction of tax? A) $4.5 B) $1.5 C) $3.5 D) $3 20) After the introduction of the tax, price received by sellers equals to A) $2.5 B) $1.5 C) $3.5 D) $4 21) How many tickets will be supplied after the introduction of the excise tax? A) 30 B) 15 C) 20 D) 10 22) After the introduction of tax, the amount of deadweight loss equals to A) $30 B) $0 C) $120 D) $60 23) Calculate the tax revenue. A) $30 B) $120 C) $180 D) $60 24) What will be consumer's tax incidence (i.e. price paid by buyers will increase by)? A) $1 B) $3 C) $2 D) $4 25) What will be seller's tax incidence (i.e. price received by sellers will decrease by)? A) $1 B) $3 C) $2 D) $4