Draw a supply and demand graph that demonstrates

Assignment Help Microeconomics
Reference no: EM132500201

A $1 tax is applied to gasoline suppliers per gallon of gasoline sold.

a. Draw a supply and demand graph that demonstrates what happens to the market with a tax. Include and label: original demand (D) and supply (S) curves, original equilibrium price (P*) and quantity (Q*), as well as the new demand (D') or supply (S') curve, new price consumers see (Pc), new price suppliers receive (Ps), and new quantity sold (Q') as a result of the tax. Label: the area that represents the government revenue as a result of the tax (REV), the dead weight loss (DWL) that results from the tax, and the new consumer surplus (CS) and producer surplus (PS) with the tax. b. If gasoline demand is more inelastic than gasoline supply, will consumers or suppliers pay for more of the tax?

Reference no: EM132500201

Questions Cloud

Develop when government intervenes in the price mechanism : Use a diagram to explain how a so-called black market can develop when government intervenes in the price mechanism by fixing prices
What conference fee must the un charge : What conference fee must the UN charge to break even if 250 people attend?
Examine the funding streams or vehicles for the program : Examine the funding streams or vehicles for this program. Explain how the findings of the program evaluation may be used to change a disease or public health.
What happened when wage rate : What happened when wage rate is below equilibrium vs above equilibrium rate.
Draw a supply and demand graph that demonstrates : Draw a supply and demand graph that demonstrates what happens to the market with a tax. Include and label: original demand (D) and supply
Explain variety of different public health evaluation models : There are a variety of different public health evaluation models that have been used for planning and evaluating smoking and alcohol abuse, youth violence.
Determine the social and behavioral risk factors : Determine the social and behavioral risk factors that are being addressed by the program, and include the theoretical approaches used in the program.
How much would kristina pay to avoid the price change : How much would Kristina pay to avoid the price change? What is the technical term for this amount?
Compute the long-run cost function for baskets of berries b : (a) Compute the long-run cost function for baskets of berries B. (b) Compute the long-run cost function for gallons of juice J.

Reviews

Write a Review

Microeconomics Questions & Answers

  Every time the order is placed for more item x it costs 10

item x is a standard item stocked in a companys inventory of component parts. each year the firm on a random basis uses

  Write your response on sales tax

Sales tax is a tax on the retail sales price of purchases (Hyman, 2014). Sales tax is an indirect tax. State governments set sales tax rate.

  Jhn doe has developed the financial retirement strategy

john doe has developed a financial retirement strategy. his plan is to invest in somewhat risky stocks for 15 years

  Calculate the cost of purchasing the equipment

Calculate the cost of purchasing the equipment. Calculate the cost of leasing the equipment. Calculate the net advantage to leasing.

  Develop objective function that would minimize total cost

Whole Foods buys organic beets from two suppliers, one in Ames and one in Zearing. The price per unit of the Ames beets is $4.50 and the price per unit of the Zearing beets is $7.00. Define variables that would tell how many units to purchase from ea..

  Exclusion in terms of both efficiency and equity

Some states exclude necessities, such as food and clothing, from their sales tax. Other states do not. Discuss the merits of this exclusion in terms of both

  Consider a homogeneous product industry with inverse market

consider a homogeneous product industry with inverse market demand given by p 1100 - 2qnbsp there is currently one

  Change in demand versus a change in quantity demanded

What is the difference between a change in demand versus a change in quantity demanded? A change in supply versus a change in quantity supplied? Why is it so important to differentiate between these similar-sounding terms?

  What nominal rate of return did the engineer receive

On April 2, 1998, an engineer bought a $1000 bond of an American airline for $875. The bond paid 6% on its principal amount of $1000.

  How will the retirement of baby boomers affect generation

Drawing Conclusions How will the retirement of baby boomers affect your generation? How do you think the baby boomers will feel about this?

  How to present the investment information

Reframe your answer to Exercise in terms of objectives and alternatives. That is, what are appropriate fundamental objectives to consider in the context.

  How does the use of diversion impact the recidivism rate

How does the use of diversion and/or probation impact the recidivism rate, if at all? Is either tactic, or both, more ?effective with certain types of offenders?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd