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

Classical model, using a graph of the classical labour market,illustrate th...

using a graph of the classical labour market,illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage.what will eventually happen i

Current value of investment, An investment promised a payoff of $195 two an...

An investment promised a payoff of $195 two and a half years from today. At a discount rate of 75% per year what is the present value of this investment? A. 169.47 B. Not enoug

Augmented dicky-fuller test, The hypotheses are: The null hypothesi...

The hypotheses are: The null hypothesis,  infers that a unit root exists, whereas the alternative hypothesis,  concludes that there is no root. Decision rule:

State the important aspects of inflation data for sweden, Four aspects are ...

Four aspects are interesting when we look at inflation data for Sweden During 1800s, when Sweden was primarily an agricultural society, deflation where almost as common as

Market structures, illustrate and discuss the market structures competitive...

illustrate and discuss the market structures competitiveand non competitive for price determination

Supply and demand , construct the supply and demand curves for rental housi...

construct the supply and demand curves for rental housing, indicating equilibrium rent and quantity. Show the effects on this market( i.e., on supply, demand, equilibrium rent and

Influx of foreign labor, If a nation were to experience an influx of foreig...

If a nation were to experience an influx of foreign labor into the market for corn production, the production possibilities frontier for the nation would: a. shift inward due to

Analyse and contrast the macroeconomic behaviour, Collecteconomic data for ...

Collecteconomic data for three countries: Australia, China and Greece.The data is toobtainedfrom official sources as time series forthe key macroeconomic variables. These arereal G

Optimal order size, A major component of the costs of many large firms  is ...

A major component of the costs of many large firms  is the cost associated with ordering and holding inventory. If the yearly demand for the good is  D and the size of each order p

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