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

Relate overnight interest rates targets with money supply, Relate Overnight...

Relate Overnight interest rates targets with money supply There are many ways to explain the important connection between the overnight interest rate target and the money suppl

Describe about components of GDP, Q. Describe about Components of GDP? ...

Q. Describe about Components of GDP? By considering all arrows to and from the goods market we see that Y + I m = C + I + G + X. Left hand side is the value of all finishe

Trends of trade shares, Trends of Trade Shares: India's share in total...

Trends of Trade Shares: India's share in total world exports in 1950 was 1.85 percent and the share in total world imports was 1.7 1 percent. The share of both exports and imp

How do you explain gni per capita, To determine of the wealth is earned by ...

To determine of the wealth is earned by nations by economic activates all around the globe. Gross National Income comprises the total value of goods and services formed within a

Keynesian theory, what is static and dynamic multiplier in keynesian theory...

what is static and dynamic multiplier in keynesian theory?

Functions of money, Functions of Money During the course of history mo...

Functions of Money During the course of history money has taken various forms. In fact, there is no difficulty in identifying money but the problem is defining money. Economis

Illustrates about the terms of elasticity, Illustrates about the terms of e...

Illustrates about the terms of elasticity? • Definition of elasticity a. Price elasticity of demand b. Income elasticity of demand and c. Price elasticity of supply

Estimating womens labor supply, 1.    Estimating Women's Labor Supply a....

1.    Estimating Women's Labor Supply a.    The following regression was run for an estimate of the current women's labor supply curve: Where h i = hours of labor suppl

Labor supply and labor demand in the keynesian model, Supply of labor, L S ...

Supply of labor, L S (W/P), depends positively on real wages in classical model. It isn't always clear which individuals are included in the labor supply. Labor supply may consist

#GDP, There are three firms in an economy: A, B, and C. Firm A buys $450 wo...

There are three firms in an economy: A, B, and C. Firm A buys $450 worth of goods from firm B and $260 worth of goods from firm C, and produces 260 units of output, which it sells

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