User Account

All Pages

Homework 5, Macroeconomics

Assignment Help:

Instructions


For the following 10 questions, consider an economy which is initially in equilibrium without a tax, with P* of $90 and Q* of 10. Later, a tax is put on the market that changes the quantity to 5, the price paid by buyers to $120 and the price received by sellers to $70. The supply and demand curves are smooth, straight lines, with the vertical intercept for the demand curve at 150 and the vertical intercept for the supply curve at 50.

1. What is consumer surplus before the tax?

2. What is producer surplus before the tax?

3. What is the amount of the tax (per unit)?

4. What is consumer surplus after the tax?

5. What is producer surplus after the tax?

6. What is the tax incidence for buyers (per unit)? Write your answer in absolute value (regardless if it is an increase or a decrease).

7. What is the tax incidence for sellers (per unit)? Write your answer in absolute value (regardless if it is an increase or a decrease).

8. What is the amount of tax revenue?

9. What is the amount of deadweight loss?

10. Which side of the market is more elastic, from your findings, and what does this imply about the slope of the curve?

A. Demand is more elastic than supply and the demand curve is flatter than the supply curve.
B. Demand is more elastic than supply and the demand curve is steeper than the supply curve.
C. Supply is more elastic than demand and the supply curve is flatter than the demand curve.
D. Supply is more elastic than demand and the supply curve is steeper than the demand curve.

Related Discussions:- Homework 5

Strategy for p1 in this game, P2 and P3 play with a penny. P1 picks between...

P2 and P3 play with a penny. P1 picks between same (S) and different (D). After observing P1's choice, P2 and P3 get to picked Simultaneously independently either head (H) and tail

Effectiveness of commercials, Suppose an advertising agency is conducting a...

Suppose an advertising agency is conducting a survey concerning the effectiveness of commercials during the Super Bowl. If 32% of people watch the Super Bowl, and if the agency con

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

Money demand, money demand = 3500 - 250i what is the interest rate present ...

money demand = 3500 - 250i what is the interest rate present if the money market is in equilibrium

Income and substitution effects of a price change, Income and Substitution ...

Income and Substitution Effects of a Price Change Indifference curve analysis can be used to separate the income effect (IE) from substitution effect (SE). This is shown in Fig

Financial crisis, how adverse selection has an impact on financial crisis

how adverse selection has an impact on financial crisis

Real per capita gdp levels, If two countries had the same initial level of ...

If two countries had the same initial level of real GDP per capita, and Country A grows at 2.8 percent, while Country B grows at 3.5 percent, how will their real per capita GDP lev

National income, working of static and dynamic multiplier in consumption fu...

working of static and dynamic multiplier in consumption function

Explain the classical growth theory, Q. Explain the classical growth theory...

Q. Explain the classical growth theory? Production function won't provide us with a theory or explanation of growth. It's only a convenient tool that helps us breaking down gro

Change of production possibilities curve affects, Analyze the relationship ...

Analyze the relationship between the production possibilities curve and the circular flow diagram. Discuss how the change of production possibilities curve affects the circular flo

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd