Draw a supply-and-demand graph

Assignment Help Mathematics

Reference no: EM131181785

Suppose that gasoline is not taxed in the country of Autopia, and the price of gasoline is $3.00 a gallon. In order to alleviate problems with air pollution and traffic, the government of Autopia decides to institute a $0.50 a gallon tax on gasoline. After the tax, the price of gasoline rises to $3.45 a gallon.

a. Assuming no other significant changes in the gasoline market, what can we conclude about the elasticity of demand for gasoline in Autopia?

b. Draw a supply-and-demand graph illustrating the effects of the gasoline tax. Assume that the supply of gasoline is not particularly elastic or inelastic.

c. Who has borne most of the burden of this tax, consumers or producers?

d. Do you think that the tax will be effective in reducing Autopia's problems with air pollution and traffic? Why or why not? Support your answer with reference to your graph.

Reference no: EM131181785

Questions Cloud

Two young college graduates opened a chain of print shops : Two young college graduates opened a chain of print shops. The chain expanded rapidly during the early 1990s and many new stores were opened. The number of print shops in operation during any year from 1990 to 2005 is given by the equation y=-2.5x..

Health information management system : "Success Factors" Please respond to the following: Determine what you believe to be the most critical factor for the successful implementation of a health information management system.

Create a uml class diagram for a survey class : Create a UML Class Diagram for a Survey class, using the application of your choice. Suggested applications are Visio, Word, Excel or Visual Paradigm. The following are requirements of the Survey class.

Causal relationship in business process : In order to understand the causal relationship in business process, manager often asks "whys" to drill down the root cause of failures. Select one (1) project from your working or educational environment and propose at least three (3) "why" questi..

Draw a supply-and-demand graph : Assuming no other significant changes in the gasoline market, what can we conclude about the elasticity of demand for gasoline in Autopia?

Discuss the conditions that can affect network performance : Discuss the conditions that can adversely affect network performance, and the current tools as well as procedures that are available to network managers for monitoring and analysis of LANs, interconnected LANs, and other networks.

How should the owner resolve given dispute : What is wrong, if anything, with the general managers approach to making sure that drivers do not steal or act carelessly?

Regarding the optimal number of magazines to purchase : A vendor keeps careful records of the number of magazines she sells each day and the various costs that are relevant to her decision regarding the optimal number of magazines to purchase. For what reason might her results be inaccurate? What would sh..

Role of social responsibility in entrepreneurship venture : Specify the role of social responsibility in an entrepreneurship venture. Discuss three to five benefits of social responsibility for the organization and for the community in terms of visibility, positive corporate image, recruitment tool, and the s..

User Account

All Pages