How much revenue will the government raise by taxing beatriz

Assignment Help Econometrics

Reference no: EM131090430

Beatriz enjoys writing and uses a large amount of paper. Currently, paper costs 2 cents per sheet. The formula for her demand curve is S = 52500 Ac€?o 5000PS , where PS is the price of and S is the number of sheets purchased. The governor of her state proposed taxing paper at the rate of $0.50 for each 100 sheets. Assume that this policy would increase the price of paper to 2.5 cents per sheet (including tax).

a. Draw BeatrizAc€?c demand curve. Using the method described in Section 6.2, compute the change in her consumer surplus for the proposed tax increase.

b. How much revenue will the government raise by taxing Beatriz? How does that revenue compare to her economic losses? Does the new tax raise enough revenue for the government to compensate her for her loss?

Reference no: EM131090430

Questions Cloud

Consistence appraisal for the task being : You are an outsider assessor, contracted to play out a consistence appraisal for the task being referred to. You are to be recognized for revealing this disaster, yet precisely how could you have been able to you isn't that right? Where did you be..

How the committee is knowledgeably populated : The authors suggest posing basic questions to identify the topic. Further, Leggett and Jackowski propose an interesting process called "looping" which helps the scholar narrow down his topic (see my reply to DQ2: Leggett and Jackowski, 2012).

How is the burden of tax shared between buyers and seller : What would happen if the tax was paid by sellers of hockey sticks instead of buyers?

Compute the costs of the ending work-in-process : 6-38 Weighted-Average MethodGifford, Inc. produces a single model of a popular cell phone in large quantities. A single cell phone moves through two departments, assembly and testing. The manufac- turing costs in the assembly department during Ma..

How much revenue will the government raise by taxing beatriz : How much revenue will the government raise by taxing Beatriz? How does that revenue compare to her economic losses? Does the new tax raise enough revenue for the government to compensate her for her loss?

Domestic sales of having multiple distribution : In general, what are the qualitative pros and cons for domestic sales of having multiple distribution centers and shipping locations in the United States?

Should wang take the quantity discount : Should Wang take the quantity discount?

What is the case against an increase in the gas tax : what is the case against an increase in the gas tax to the European level?

Tort system were deemed method of social insurance : If the tort system were deemed a method of social insurance rather than one of deterrence of uneconomical accidents, would awards in tort cases be on average higher or lower than under the deterrence rationale? (Using the perspective of economics)

User Account

All Pages