Question

f we consider the supply and demand for gizmos to be as follows : Ps =...

f we consider the supply and demand for gizmos to be as follows : Ps = 2Qs + 50 Supply Equation Pd = 150 – 3Qd Demand Equation If the government imposes a tax (Pt) of $6 on each gizmo, what is the deadweight loss (DWL)? Given your answer in d, what is the social surplus lost due to the tax? Compute the leakage of the tax imposition?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
If we consider the supply and demand for gizmos to be as follows : Ps =...
If we consider the supply and demand for gizmos to be as follows : Ps = 2Qs + 50 Supply Equation Pd = 150 – 3Qd Demand Equation If the government imposes a tax (Pt) of $6 on each gizmo, what is the deadweight loss (DWL)? Given your answer in d, what is the social surplus lost due to the tax? Compute the leakage of the tax imposition?
Demand for face masks is characterized by the equation Pd=80-3Qd, while supply is characterized by Ps=10+2Qs....
Demand for face masks is characterized by the equation Pd=80-3Qd, while supply is characterized by Ps=10+2Qs. Price is in dollars and the quantity is in thousands. What would be the result of a tax of $15 per face mask? A. Govt revenue of 81,250 and deadweight loss of 3,125. B. Govt revenue of 22,500 and deadweight loss of 165,00. C. Govt revenue of 165,00 and deadweight loss of 22,500. D. Government revenue of 3,125 and deadweight loss of 81,250.
The inverse demand curve for delivery meals is: Pd=18-3Qd the inverse supply curve is: Ps=3Qs where...
The inverse demand curve for delivery meals is: Pd=18-3Qd the inverse supply curve is: Ps=3Qs where p is price of meal in dollars, Q is quantity in thousands of meals a.) solve for equilibrium price and quantity b.) draw the supply and demand curves and the equilibrium outcome on axes below and label graph c.) Calculate the consumer surplus and producer surplus in this market, and show them on the set of axes above. d.) suppose the government imposes a...
Q1. Assume that Demand and Supply are given by the equations Pd = 50 - 2Q...
Q1. Assume that Demand and Supply are given by the equations Pd = 50 - 2Q Ps = 10 + 1Q Where prices are expressed in cents. a. How would you modify the equations to represent a unit tax of 6 cents per unit? b. Sketch the demand and supply curves and illustrate the effect of the tax? c. Compute the deadweight loss due to the tax of 6 cents per unit? d. What would happen to the DWL if...
Consider the national market for electric school buses with the demand given by Qd=600-2P and supply...
Consider the national market for electric school buses with the demand given by Qd=600-2P and supply given by Qs=3P-150. (Note: the price is in thousands of US$ and quantity is in thousands of buses). (10pts) Calculate the Total Surplus at the equilibrium point and provide a succinct argument as to why the equilibrium represents an efficient allocation of resources in this market. (10pts) Consider now that the price of electric school buses increases by $60 (thousands) above the equilibrium price...
Suppose that the Demand and Supply functions are : QD=800-4P and QS=8P-160. The government imposes a...
Suppose that the Demand and Supply functions are : QD=800-4P and QS=8P-160. The government imposes a per unit tax of $3. After the tax, the supply equation becomes: QS=8P-184. (Hint: you really should draw a graph for this question, as you did in the Extra Credit) Find Government Revenues and Deadweight Loss (DWL) AFTER the tax Select one: a. Government Revenues = 1,416; DWL = 12 b. Government Revenues = 1,416; DWL = 8 c. Government Revenues = 1,440; DWL...
Let the market demand curve be QD=8-P and the market supply curve be QS=P. Let price...
Let the market demand curve be QD=8-P and the market supply curve be QS=P. Let price P be measured in $/unit and let quantity Q be measured in singular units (i.e. simple count). Solve for the equilibrium price P* and quantity Q*. Now, assume the government imposes a $2/unit tax on consumers, which leads to wedge/gap between the buyers’ price Pb and the sellers’ price PS. Rewrite the demand and supply curves using Pb and PS, respectively. Write down the...
Suppose that the demand equation: P = 6 – Q and supply equation: P = Q....
Suppose that the demand equation: P = 6 – Q and supply equation: P = Q. a. Calculate the price elasticity of demand at equilibrium. b. Calculate the equilibrium price and quantity, and consumer surplus and producer surplus. c. Suppose government imposes a unit tax of $1 on producers. Derive the new supply curve and also calculate the new equilibrium price and quantity. d. Calculate tax revenue and the deadweight loss of this tax.
Suppose that the demand curve for wheat is D(p) = 120 − 10p and the supply...
Suppose that the demand curve for wheat is D(p) = 120 − 10p and the supply curve is S(p) = 2p. Compute the consumer and producer surplus at the equilibrium. Indicate them on a clearly marked graph. Assume that the government imposes a specific tax of $2.4 on wheat, to be paid by the consumers. Compute the government revenue and the deadweight loss generated by this tax.
Consider a market where supply and demand are given by QXS = -18 + PX and...
Consider a market where supply and demand are given by QXS = -18 + PX and QXd = 90 - 2PX. Suppose the government imposes a price floor of $41, and agrees to purchase and discard any and all units consumers do not buy at the floor price of $41 per unit. a. Determine the cost to the government of buying firms’ unsold units. b. Compute the lost social welfare (deadweight loss) that stems from the $41 price floor.