Economic advisor to the treasury

Assignment Help Business Economics

Reference no: EM131173867

You are an economic advisor to the Treasury of the United States. Congress is considering increasing the sales tax on gasoline by $.03 per gallon. Last year motorists purchased 10 million gallons of gas per month. The demand curve is such that every $.01 increase in price decreases sales by 100,000 gallons per month. You also know that for every $.01 increase in price, producers are willing to provide 50,000 more gallons of gas to the market. The legislature has stated that the $.03 tax will increase goverment revenue by $300,000 per month and raise the price of gasoline by $.03 per gallon. Is this correct? Show calculation and a graph to support the answer.

Reference no: EM131173867

Questions Cloud

Calculate the equilibrium price and quantity : Calculate the equilibrium price and quantity. Assume that a price ceiling of $7 is appied to this market. What is the deadweight loss (loss of social welfare) that results in the interruption of market mechanism? Calculate the dollar amount. Draw a g..

Find the effective gross hourly cost : A tool and die worker is paid $26.50 per hour. The work year consists of 52 40-hour weeks with overtime schedules for 26 Saturdays. The company allows 8 paid holidays and 10 days of vacation. Four days of sick leave are budgeted and have historically..

Suppose economy produces only food and housing : Suppose an economy produces only food and housing. Draw and explain the characteristics of its production possibilities curve. Show and explain the impact on the curve of a new technology that improves food production only; a new invention that impro..

Labor is a resource that needs to be used efficiently : Given that labor is a resource that needs to be used efficiently, what responsibility do you feel the government has in decreasing unemployment? Does the negative relationship between inflation and unemployment have any impact on your decision? Pleas..

Economic advisor to the treasury : You are an economic advisor to the Treasury of the United States. Congress is considering increasing the sales tax on gasoline by $.03 per gallon. Last year motorists purchased 10 million gallons of gas per month. The demand curve is such that every ..

The projected population growth : The projected population growth for Country A from the year 2000 to the year 2100, based on a 3.5% growth rate, will cause the population to rise from 30 million to 960 million. Assume Country A is approximately the size of Nebraska, Kansas and Oklah..

Market for plastic toothpicks most closely resembles : Pic Inc. produces plastic toothpicks that it sells to distributors in the Southwest. Assuming that the market for plastic toothpicks most closely resembles that of perfect competition and that other firms in the industry do not experience similar cos..

Owning the market : In the lesson presented by Sal on Oligopolies and Monopolistic Competition he creates a two dimensional grid of the market types based on number of competitors and degree of product differentiation. Make sure you view this lesson. Now apply the lesso..

Identify the private and public partnership structure : Provide a brief description of 3-5 CIKR that exist within your community. Select one CIKR and identify the private and public partnership structure. What Sector-Specific Agency would be responsible for providing institutional knowledge / and speciali..

User Account

All Pages