The following graph shows the daily market for shoes. Suppose the government institutes a tax of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following graph shows the daily market for shoes. Suppose the government institutes a tax of $11.60 per pair. This places a wedge between the price buyers pay and the price sellers receive. ? 50 45 40 Supply Tax Wedge PRICE (Dollars per pair) 35 30 25 20 10 10 Demand Homework (Ch 06) PRICE (Dollars per pair) 2228822 50 40 20 15 S 0 Tax Wedge 50 100 150 200 250 300 350 QUANTITY (Pairs of shoes) Supply Demand 400 450 500 @ Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay (Pairs of shoes) (Dollars per pair) Price Sellers Receive (Dollars per pair) Before Tax After Tax Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per pair) Elasticity Buyers Sellers The burden of the tax falls more heavily on the elastic side of the market. Grade It Now Save & Continue Continue without saving The following graph shows the daily market for shoes. Suppose the government institutes a tax of $11.60 per pair. This places a wedge between the price buyers pay and the price sellers receive. ? 50 45 40 Supply Tax Wedge PRICE (Dollars per pair) 35 30 25 20 10 10 Demand Homework (Ch 06) PRICE (Dollars per pair) 2228822 50 40 20 15 S 0 Tax Wedge 50 100 150 200 250 300 350 QUANTITY (Pairs of shoes) Supply Demand 400 450 500 @ Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Quantity Price Buyers Pay (Pairs of shoes) (Dollars per pair) Price Sellers Receive (Dollars per pair) Before Tax After Tax Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity of demand and supply over the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per pair) Elasticity Buyers Sellers The burden of the tax falls more heavily on the elastic side of the market. Grade It Now Save & Continue Continue without saving
Expert Answer:
Answer rating: 100% (QA)
From the given graph it is evident that the after tax buyers pay 35 in the g... View the full answer
Related Book For
Posted Date:
Students also viewed these economics questions
-
The following graph shows the daily market for extra-large cardboard boxes in San Diego. Suppose that Talero is one of more than a hundred competitive firms in San Diego that produce such cardboard...
-
The following graph shows the daily market for wine when the tax on sellers is set at $0 per bottle. Suppose the government institutes a tax of $23.20 per bottle, to be paid by the seller. (Hint: To...
-
Suzanne acquired the following ordinary shares in Quarine plc: She made no further acquisitions and the shares were valued at 3.20 each on 31 March 1982. On 24 July 2020, Suzanne sold 1,200 shares...
-
Moxie Corporation incurs research and development costs of $500,000 in 2011, 30 percent of which relates to development activities subsequent to certain criteria having been met that suggest that an...
-
Patrick Corporations adjusted trial balance contained the following asset accounts at December 31, 2025: Prepaid Rent $12,000, Goodwill $50,000, Franchise Fees Receivable $2,000, Franchises $47,000,...
-
The auditor must audit other information in documents containing audited financial statements. Do you agree? Why or why not?
-
Topper Toys has developed a new toy called the Brainbuster. The company has a standard cost system to help control costs and has established the following standards for the Brainbuster toy: Direct...
-
The temperature in Middletown Park at 6:00 AM last Sunday was 40.4 degrees Fahrenheit. The temperature was changing at a rate given by r(t) = 3.24 cos +0.034 where t is in hours after 6:00 AM last...
-
What are the major causes of information risk? How can information risk be reduced?
-
Prepare a document that indicates the following for each of the scenarios below: Would the research required to make the decision or gather the needed data be primary or secondary research. If you...
-
Find the following matrix product, if it exists. 35 -1 -1 3 -55 -2 02 -5 0
-
The following list of variables is associated with student life. Define whether they are: (i) A = Quantitative or B = Qualitative; (ii) A = Continuous, B = Discrete or C = NA (i.e. NA if not...
-
Consider the table for the function h(x) below. x 2.900 h(x) 4.24518 2.990 4.24983 2.999 4.24998 3.000 6.00000 3.001 4.25002 3.010 4.25034 3.100 4.25487 (a) Find h(3). Explain your answer. (b)...
-
Many firms use derivative instruments to hedge exposure to changes in the fair value of an asset or liability, or to hedge exposure to variability in expected future cash flows. As an analyst...
-
c. You have RM300,000 and you expect to retire at the end of this year. You also expect to live for another 25 years, and to be able to earn 8% on your invested funds. How much could you withdraw at...
-
(a) (b) (c) (d) Describe two characteristics of linear time-invariant (LTI) systems with appropriate examples or/and equations. [6] Consider the control system shown in Figure Q1b. Correction...
-
Pappa's Appliances uses the periodic inventory system. Details regarding the inventory of appliances at January 1, purchases invoices during the year, and the inventory count at December 31 are...
-
What does it mean to say that workers and firms have rational expectations?
-
Look again at the information in Figure 2.4 on page 49. Choose a rate of trading cherries for apples different from the rate used in the text (15 pounds of cherries for 10 pounds of apples) that will...
-
What do economists mean by scarcity? Can you think of anything that is not scarce according to the economic definition?
-
What is thermodynamics?
-
An astronaut weighs \(800 \mathrm{~N}\) on the earth's surface where the acceleration of gravity is \(g=9.83 \mathrm{~m} / \mathrm{s}^{2}\). The mass and the radius of the moon are \(7.4 \times...
-
Explain the scope and limitations of thermodynamics.
Study smarter with the SolutionInn App