Calculate tax equilibrium quantity, Macroeconomics

Assignment Help:

1. Consider two projects.  The first project pays benefits of $90 today and nothing else.  The second project pays nothing today, nothing one year from now, but $100 two years from now.  Which project would be preferred if the discount rate were 0%?  What if the rate increased to 10%?

2. Suppose that the original before-tax demand curve is P = 98-2Qd and that supply is P = 2+2Qs.  Now suppose a $3 unit tax is imposed on consumers.
a.  Use supply and demand diagrams to show the effect of a $3-unit tax imposed on the demand side.         
b.  What is the before-tax equilibrium price and quantity?
c.  What is the after-tax equilibrium quantity?
d.  Calculate the economic incidence incurred by producers and the economic incidence incurred by consumers.
e.  How much tax revenue is raised?


Related Discussions:- Calculate tax equilibrium quantity

Help needed, what are the advantages and disadvantages of unemployment

what are the advantages and disadvantages of unemployment

Open economy model, Use a diagram of the open economy model (e.g. fig 32.4 ...

Use a diagram of the open economy model (e.g. fig 32.4 from the text) to illustrate and explain the effect of the following event on the market for loanable funds, the level of net

What are between material and non-material progress, What are between mater...

What are between material and non-material progress? • Material progress considers to as economic growth. Growth is only one dimension of development. Growth doesn’t unavoidab

Demand in the local hardware industry, The elasticity of demand in the loca...

The elasticity of demand in the local hardware industry is -2, while in the video market it is. Which industry has a higher markup over marginal cost (as a percentage of price)?

Utility maximisation - graphical presentation , Utility Maximisation: ...

Utility Maximisation: Graphical Presentation  Let consider a two-commodity world, x 1 and x 2 representing good I and good II respectively. p 1 and p 2 are the prices o

FEDERAL BUDGET, HOW TO GET THE REVENUES AND EXPENDITURES AS A PERCENT OF GD...

HOW TO GET THE REVENUES AND EXPENDITURES AS A PERCENT OF GDP?

Assignment, Consider the economic data for Country A: Unemployment level of...

Consider the economic data for Country A: Unemployment level of 15% Natural Rate of Unemployment is 6%. Required Reserves is 25% C = 50 + 0.75Y; I = 600; G = 250 (note: T = 200 for

Industrial production and agricultural production, Industrial Production an...

Industrial Production and Agricultural Production  Industrial production and agricultural production are aggregate measures of sectoral outputs. It is a common practice to divi

Financial and real investment, Financial and Real Investment Financial ...

Financial and Real Investment Financial investment simply means transfer of right from one party to another. While one party has made investment, the other has made disinvestme

Bonds are more attractive to investors, Briefly explain if you agree with t...

Briefly explain if you agree with the following statement: If interest rates rise, bonds become more attractive to investors, so bond prices rise. Therefore, when the interest rat

Write Your Message!

Captcha
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