Effect of placing an excise tax on cigarettes

Assignment Help Microeconomics
Reference no: EM13933430

1. The equilibrium price of bananas is $4 a kilo in both city A and city B. The supply curve of bananas is the same in both cities. A price of $3 a kilo is set in both A and B. The price elasticity of demand is higher in city B. With the aid of two diagrams , explain in which city the shortage of bananas will be greatest.

2. Show the effect of placing an excise tax on cigarettes, mark clearly the price paid by consumers as Pc and the price received by producers as Py. Show the amount of tax revenue raised by the government and what proportion of this is paid by consumers and what proportion is paid by producers. Be careful to show any effects that elasticity may play in the distribution of the tax.

3. How do perfect competition and monopoly differ in terms of economic efficiency? Remember to define all your terms and use appropriate diagrams to illustrate your answer.

4. Explain what is meant by the term ‘externality' . Describe with the aid of a diagram a negative externality associated with consumption . Show theprivate and social costs or benefits in the market.

Reference no: EM13933430

Questions Cloud

What are its tie ratio and return on invested capital : The H.R. Pickett Corp. has $500,000 of interest-bearing debt outstanding, and it pays an annual interest rate of 10%. In addition, it has $700,000 of common stock on its balance sheet. It finances with only debt and common equity, so it has no prefer..
Prepare a trial balance to prove the equality : Prepare a trial balance to prove the equality of debits and credits.
Find the constant of integration : Find the constant of integration, C if:   y = ò (9x2 + 2x - 9)dx and the curve passes through the point (2, 4)
What is its times-interest-earned ratio : Graser Trucking has $19 billion in assets, and its tax rate is 35%. Its basic earning power (BEP) ratio is 19%, and its return on assets (ROA) is 5%. What is its times-interest-earned (TIE) ratio?
Effect of placing an excise tax on cigarettes : Show the effect of placing an excise tax on cigarettes, mark clearly the price paid by consumers as Pc and the price received by producers as Py.
What is share price today : Superapp Inc. has just paid a dividend of $10 per share. Superapp pays dividends once a year, and dividends are expected to grow at 4% per year. Superapp’s equity beta is 1.5. The market risk premium is 8%, and the risk-free rate is 2%. Based on this..
Does political ideology impact government response to drug : Does political ideology impact the government response to drug trafficking, organized crime, and white-collar crime?Provide rationale and statistics from the real world to support your viewpoint.
Covered interest rate parity holds : The current spot exchange rate is 1 USD = 6.40 NOK, and the 90-day forward exchange rate is 1 USD = 6.50 NOK. The 90-day interest rate in Norway is 10%. Suppose that the covered interest rate parity holds. 3 What is the 90-day interest rate in the US..
Pearl equestrian centre app project : Pearl Equestrian Centre offers a full service boarding facility geared towards the needs of riders and their equestrian desires. The 100 acre facility is home to multiple trainers and clinicians.

Reviews

Write a Review

Microeconomics Questions & Answers

  What is the optimal level of pollution abatement

A factory benefits from discharging effluent, q, into a lake. The marginal benefit function is given by 60-2q. The pollution causes damages to two nearby communities. The marginal damages to Community A are 1q. The marginal damages to community B ..

  Labor force growth rate and a depreciation rate

Presume that both Country A and Country B have the same production function: Y/L = 6*(K/L)0.5. But, Country A has a capital-to-labor ratio that is initially twice as big as Country B. In addition, Country A has a 10% saving rate, a 10% labor force gr..

  The price elasticity of demand

The price elasticity of demand for senior citizens purchasing coffee from McDonald's is -5 while non senior citizens have a price elasticity of demand equal to -1.25.

  Beliefs integral to the development

Need five sentences responding to each response to the questions. Two separate responses. Try not to use technical words. 1.Describe Janie's relationship to her Grandmother Nanny. What values or beliefs does her grandmother voice and how are Janie's ..

  What is the ratio of the output per worker

What is the ratio of the output per worker (assumed proportional to their wages) of a Country X that has 10 years of schooling to a Country Y that has 7 years of schooling?

  Purpose of speech

Purpose of speech is to persuade you affirmative action is good globally for businesses, schools, women, minorities, and the economy.

  What fiscal policies do you think caused the crisis

What monetary policies do you think caused the crisis 2. What were the effects of the policies implemented in reaction to the crisis 3. Do you think the solutions worked in the short term? In the long term? Fiscal policies 1. What fiscal ..

  Economics-decision making in multi-national firms

Can you articulate how macroeconomics and microeconomics come into play in the context of firm decision-making in a global business. Please provide an example.

  What is the difference between implicit and explicit costs

What is the difference between implicit and explicit costs? Which costs do economists take into consideration? Why? -- Use a specific example to explain how economic cost is calculated.

  Which set of years most clearly demonstrates the

a countrys annual growth rates over a 10-year period are shown in the following table.year growth rate 1 5 2 3 3 4 4 -3

  What must be the new annual instalment

You borrowed $20,000 to finance the education expenses for your senior year of college at the beginning of your senior year. The loan will be paid off over five years and the first instalment will be due a year later. The loan carriers and interest r..

  Summarize the differences between the four market types

select one of the following companiesmiddot pepsi-cola companymiddot wal-mart stores inc.middot

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