The following graph shows the daily market for wine when the tax on sellers is set...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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 see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then, enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool (? Market for Wine 200 I Quantity (Bottles of wine) 180 50 160 Demand Price (Dollars per bottle) Supply Price (Dollars per bottle) Supply 300.00 68.00 140 120 50, 68 Shifter 100 Tax on Sellers (Dollars per bottle) 0.00 Demand 40 20 O 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bottles of wine) PRICE (Dollars per bottle) 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 Price Sellers Receive (Bottles of wine) (Dollars per bottle) (Dollars per bottle) Before Tax 250 100.00 100.00 After Tax Using the data you entered in the previous table, calculate the tax burden that falls on buyers and sellers, respectively, and calculate the price elasticity of demand and supply throughout the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per bottle) Elasticity Buyers less Sellers more The burden of the tax falls more heavily on the elastic side of the market. 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 see the impact of the tax, enter the value of the tax in the Tax on Sellers field and move the green line to the after-tax equilibrium by adjusting the value in the Quantity field. Then, enter zero in the Tax on Sellers field. You should see a tax wedge between the price buyers pay and the price sellers receive.) Use the graph input tool to help you answer the following questions. You will not be scored on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool (? Market for Wine 200 I Quantity (Bottles of wine) 180 50 160 Demand Price (Dollars per bottle) Supply Price (Dollars per bottle) Supply 300.00 68.00 140 120 50, 68 Shifter 100 Tax on Sellers (Dollars per bottle) 0.00 Demand 40 20 O 50 100 150 200 250 300 350 400 450 500 QUANTITY (Bottles of wine) PRICE (Dollars per bottle) 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 Price Sellers Receive (Bottles of wine) (Dollars per bottle) (Dollars per bottle) Before Tax 250 100.00 100.00 After Tax Using the data you entered in the previous table, calculate the tax burden that falls on buyers and sellers, respectively, and calculate the price elasticity of demand and supply throughout the relevant ranges using the midpoint method. Enter your results in the following table. Tax Burden (Dollars per bottle) Elasticity Buyers less Sellers more The burden of the tax falls more heavily on the elastic side of the market.
Expert Answer:
Answer rating: 100% (QA)
Answer Solution Q Price buyer pays price seller receiv... View the full answer
Related Book For
A Survey of Mathematics with Applications
ISBN: 978-0134112107
10th edition
Authors: Allen R. Angel, Christine D. Abbott, Dennis Runde
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 long-run average total cost curve for a perfectly competitive firm. Refer to points A, B, and C on the graph and identify where the firm would experience economies of...
-
The following graph shows three supply curves with varying degrees of price elasticity. Identify the perfectly elastic, perfectly inelastic, and unit elastic supply curves. Price Price Price Quantity...
-
What is the discount yield, bond equivalent yield, and effective annual return on a $ 5 million commercial paper issue that currently sells at 98.625 percent of its face value and is 136 days from...
-
What are the "stabilization wedges" that could help flatten or reduce our CO2 emissions?
-
The heat of hydration of dough, which is 15 kJ/kg will raise its temperature to undesirable levels unless some cooling mechanism is utilized. A practical way of absorbing the heat of hydration is to...
-
Which types of economic damages are related to digital crimes?
-
1. Describe Samsung as a conglomerate. What type of diversification does Samsung pursue? 0Identify possible factors such as core competencies, economies of scale, and economies of scope that might...
-
Laverne owns 100% stock of the Pizza Bowl, Inc. (PB), which operates a classy combination bowling alley/pizza parlor. Her basis in the stock is $24,000. In its first year of existence, PB earned...
-
Overview The milestone for Project One involves applying accounting principles and methods to long-term liabilities and equity. You will also evaluate these financial statement components for...
-
Investments A and B have the net cash flows given below. End of year 1 2 4 A $250 $75 $75 $75 $150 -$250 $150 $150 $75 $75 Compare the present worth of A with the present worth of B for an interest...
-
What does it mean to create messages using the COOPERATIVE PRINCIPLE and using "I" and "We" language?
-
Write a generic method that compares its 2 arguments using theequals method and returnstrue if they are equal andfalse otherwise. Ensure that the name of your method includes your last name . Use...
-
1. Outline the problems of traditional lending methods and possible solutions. Are there any problems with the solutions? 2. Explain the circumstances in which you would use securitization and the...
-
Another critical reading strategy is to have a conversation with the text and ask questions as you read because it helps readers focus on the meaning of the text. As you were reading the text, what...
-
Research in the fields of Management and Leadership can be very thought-provoking - sometimes to the point of changing your whole outlook on something. I would like you to see if there is an article...
-
Which of the following is correct regarding collectables? Question 19 Select one: A capital loss from a collectable cannot be offset against a capital gain from any other category of CGT asset. A...
-
What tools are available to help shoppers compare prices, features, and values and check other shoppers opinions?
-
Determine (a) The area (b) The perimeter of the figure. 5 m 5 m 3 m 6 m 3 m
-
Find the missing value indicated by the question mark. Use the following formula. (Number of vertices) - (number of edges) + (number of faces) = 2 Number of Vertices Number of Edges Number of Faces 4...
-
Determine if the system is commutative. Explain how you determined your answer. P A P P
-
What are presumptions, and why are they important?
-
What is the burden of proof in a criminal trial? How does it compare to the burden of proof in a civil trial?
-
Distinguish between adversarial and inquisitorial justice.
Study smarter with the SolutionInn App