Reference no: EM13987088
Suppose the market for cigarettes is characterized by the following information:
Qd = 70 – 5P [Demand] Qs = 3P – 10 [Supply]
[Note: P = price per unit; Qd = thousands of units demanded; Qs = thousands of units supplied]
Suppose the government imposes a sales tax of $2 per unit. Answer questions (i) through (v) below:
i) Calculate the magnitude of the consumer surplus and producer surplus in the pre-tax equilibrium.
ii) Calculate the tax revenue in the post-tax equilibrium.
iii) Calculate the change in consumer surplus due to the sales tax.
iv) Calculate the change in producer surplus due to the sales tax.
v) Calculate the Dead-Weight-Loss due to the sales tax.
B. Suppose the government imposes a price ceiling of $50 on a market characterized by the following information:
Qd = 700 - 2P Qs = 100 + 4P
[Note: P = price per unit; Qd = hundreds of units demanded; Qs = hundreds of units supplied]
Calculate the magnitude of deadweight loss from the price ceiling. Find a price floor that will result in the same magnitude of deadweight loss.
|
What is the initial demand for loanable funds-investment
: Money Demand =8750-500i Loanable Funds Demand = 2000 –100i Initial Reserves: $500 Y1=15600 Y2=14000 Reserve Ratio: 8% MPC=0.8 Tax Revenue: $1100 Govt Purchases: $1000 Suppose the Government is implementing fiscal policy. What is the new level of Gove..
|
|
How far will the combined bullet and block move
: A bullet of mass 20.0g is fired at an intital velocity of 200m/s into a 15.0 kg block that is intitally at rest. The combined bullet and block move over a rough surface of coeffcient at kinetic friction of 0.500. How far will the combined bullet ..
|
|
Calculate the magnitude and direction of the couloumb force
: Calculate the magnitude and direction of the couloumb force on the 6.00 μC charge due to 1.50 μC and - 2.00 μC charges. μC stands for microcouloumb.
|
|
The greatest impact on the exchange rate
: What is the probable effect of each of the following on the exchange rate of a country, other things being equal? More domestic oil is discovered and developed. Which two of these do you think would have the greatest impact on the exchange rate?
|
|
Consumer surplus and producer surplus in pre-tax equilibrium
: Calculate the magnitude of the consumer surplus and producer surplus in the pre-tax equilibrium. Calculate the tax revenue in the post-tax equilibrium. Calculate the change in consumer surplus due to the sales tax. Calculate the magnitude of deadweig..
|
|
What are some of the symptoms of panic disorder
: Provide the following details about the disorder: What are some of the symptoms? What would this disorder look like in person? Make sure you relate this back to the DSM criteria
|
|
Assume that the economy is currently at potential real gdp
: Assume that the economy is currently at potential real GDP. Which of the following would put the economy in an inflationary gap? A) temporary increase in wages B) greater stock market wealth C) higher business taxes D) higher marginal taxes
|
|
Based on your calculations rank the projects and support
: Using a 4.5% discount rate, calculate the Net Present Value, Payback, Profitability Index, and IRR for each of the investment projects below (note, the inflows are for each year).
|
|
Government control of price-output-entry of new firms
: Government control of price, output, entry of new firms, and quality of service in industries where monopoly appears desirable are known as
|