Question
Price (E) 4 6 8 10 12 Quantity demanded 16 12 8 4 0 Quantity supplied 4 6 8 10 12 (a) Draw the
Price (E) 4 6 8 10 12 Quantity demanded 16 12 8 4 0 Quantity supplied 4 6 8 10 12 (a) Draw the demand and supply curves from the data in Table 1. (b) What is the equilibrium quantity demanded and supplied? The govemment now imposes a specific tax of 3 per unit. (c) Show the effect of this on the diagram. (d) What is the new equilibrium quantity demanded and supplied? (e) What is the new equilibrium price? (F) What is the incidence of tax per unit on (i) the consumer and (ii) the producer? (g) What is (i) the tax per unit and (ii) total govemment revenue from the tax? (h) By how much will the before tax revenue of producers change?
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Macroeconomics Principles And Policy
Authors: William J. Baumol, Alan S. Blinder
11th Edition
0324586213, 978-0324586213
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