Question

5. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 40 billion bottles of wine were sold every year at a price of $5 per bottle. After the tax, 34 billion bottles of wine are sold every year; consumers pay $6 per bottle, and producers receive $2 per bottle (after paying the tax). The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. True False Continue without saving.

Answer #1

5. Calculating tax incidence
Suppose that the U.S. government decides to charge wine
producers a tax. Before the tax, 15,000 bottles of wine were sold
every week at a price of $7 per bottle. After the tax, 10,000
bottles of wine are sold every week; consumers pay $9 per bottle,
and producers receive $6 per bottle (after paying the tax). The
amount of the tax on a bottle of wine is $ ? per bottle. Of this
amount, the burden...

Suppose that the U.S. government decides to charge wine
producers a tax. Before the tax, 30,000 bottles of wine were sold
every week at a price of $7 per bottle. After the tax, 25,000
bottles of wine are sold every week; consumers pay $9 per bottle,
and producers receive $6 per bottle (after paying the tax). The
amount of the tax on a bottle of wine is $_____ per bottle. Of this
amount, the burden that falls on consumers is...

Suppose that the U.S. government decides to charge wine
producers a tax. Before the tax, 10 million bottles of wine were
sold every month at a price of $4 per bottle. After the tax, 3
million bottles of wine are sold every month; consumers pay $7 per
bottle, and producers receive $2 per bottle (after paying the
tax).
The amount of the tax on a bottle of wine is -----per bottle. Of
this amount, the burden that falls on consumers...

Suppose that the U.S. government decides to charge wine
producers a tax. Before the tax, 50 million bottles of wine were
sold every month at a price of $6 per bottle. After the tax, 43
million bottles of wine are sold every month; consumers pay $9 per
bottle, and producers receive $4 per bottle (after paying the
tax).
The amount of the tax on a bottle of wine is ______ per bottle.
Of this amount, the burden that falls on...

2.Calculating tax incidence
Suppose that the U.S. government decides to charge beer
producers a tax. Before the tax, 30 million cases of beer were sold
every month at a price of $6 per case. After the tax, 24 million
cases of beer are sold every month; consumers pay $7 per case, and
producers receive $3 per case (after paying the tax).
The amount of the tax on a case of beer is __ per case. Of this
amount, the burden...

Calculating tax incidence
Suppose that the U.S. government decides to charge beer
consumers a tax. Before the tax, 50,000 cases of beer were sold
every week at a price of $7 per case. After the tax, 43,000 cases
of beer are sold every week; consumers pay $10 per case (including
the tax), and producers receive $5 per case.
The amount of the tax on a case of beer is $_____
per case. Of this amount, the burden that falls on...

Suppose that the U.S. government decides to charge beer
consumers a tax. Before the tax, 25,000 cases of beer were sold
every week at a price of $4 per case. After the tax, 19,000 cases
of beer are sold every week; consumers pay $5 per case (including
the tax), and producers receive $1 per case. The amount of the tax
on a case of beer is $_______ per case. Of this amount, the burden
that falls on consumers is $____...

Suppose the average monthly demand for cigarettes can be
described by the equation QD = 30−p, and supply can be described by
the equation QS = 18+2p, where p is the price of a pack of
cigarettes. When there is no tax on cigarettes, the equilibrium
price is p0 =$4 per pack and Q0 =26.
(a) Suppose the government sets a specific tax on tobacco
producers of τ = $1.50 per pack to reduce tobacco consumption. How
much do consumers...

Suppose officials in the U.S. want to reduce the national
cigarettes consumption from the current 400 billion to 300 billion
cigarette packs per year. They propose two workable solutions that
would each bring about such a reduction of 100 billion cigarette
packs sold and purchased.
Option 1 is to place a tax on every cigarette pack sold.
Option 2 is to impose a price floor on what consumers have to
pay for a pack of cigarettes.
(a) Provide a separate...

Q1 Ch1 (20%) a. Supply: Suppose the following information is
known about a market: 1. Sellers will not sell at all below a price
of $2. 2. At a price of $10, any given seller will sell 10 units.
3. There are 100 identical sellers in the market. Assuming a linear
supply curve, use this information to derive the market supply
curve. b. Demand: Suppose the demand for a particular product can
be expressed as Q = 100/p. Calculate the...

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