CENGAGE | MINDTAP Homework (Ch 08) 4. The Laffer curve dy Tools Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for beer, which is shown on the following graph. Tips Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Tips Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool (?) 50 Market for Beer 45 Supply Quantity 24 (Cases) Demand Price 30.00 Supply Price 20.00 (Dollars per case) (Dollars per case) Tax 10.00 (Dollars per case) PRICE (Dollars per case) Demand O 0 6 12 18 24 30 36 42 48 54 60 QUANTITY (Cases) OLOL ONECOV W ENGCENGAGE |MINDTAP Q Search this Homework (Ch 08) Suppose the government imposes a $10-per-case tax on suppliers. cudy Tools At this tax amount, the equilibrium quantity of beer is cases, and the government collects $ in tax revenue. ss Tips Now calculate the government's tax revenue if it sets a tax of $0, $10, $20, $25, $30, $40, or $50 per case. (Hint: To find the equilibrium quantity after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by using ss Tips the green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. 600 540 480 Laffer Curve 420 360 300 TAX REVENUE (Dollars) 240 180 120 60 HOLDLOVECOV W ENG 4 )CENGAGE | MINDTAP Homework (Ch 08) (? 600 A 540 480 Laffer Curve 420 360 300 TAX REVENUE (Dollars) 240 180 120 60 5 10 15 20 25 30 35 40 45 50 TAX (Dollars per case) Suppose the government is currently imposing a $15-per-case tax on beer. True or False: The government can raise its tax revenue by decreasing the per-unit tax on beer. O True Wge.com/static M Gmail YouTube Maps = News Translate Capstone Project: (.. CENGAGE | MINDTAP Homework (Ch 08) True or False: The government can raise its tax revenue by decreasing the per-unit tax on beer. O True O False Consider the deadweight loss generated in each of the following cases: no tax, a tax of $20 per case, and a tax of $40 per case. On the following graph, use the black curve (plus symbols) to illustrate the deadweight loss in these cases. (Hint: Remember that the area of a triangle is equal to - x Base x Height. In the case of a deadweight loss triangle found on the graph input tool, the base is the amount of the tax and the height is the reduction in quantity caused by the tax.) 600 + 540 Deadweight Loss 480 420 360 300 DEADWEIGHT LOSS (Dollars) 240 180 LOU -CO V WM Gmail YouTube Maps G News Translate Capstone Project: (. CENGAGE |MINDTAP Homework (Ch 08) and the height is the reduction in quantity caused by the tax.) ? 600 540 480 Deadweight Loss 420 360 300 DEADWEIGHT LOSS (Dollars) 240 180 120 60 0 0 5 10 15 20 25 30 35 40 45 50 TAX (Dollars per case) As the tax per case increases, deadweight loss Grade It Now Save & C L O U - CO W