Hello Tutors,
Please Assist me with these problems.
An clear visual explanation and step by step walkthrough would be great.
If there is any other things that I forgot to include... Please reach out and ask.
I will include the video for subsidies on Problem 4 (Not needed but can help) :
https://www.youtube.com/watch?v=LTFxRlACebk&feature=youtu.be&ab_channel=MarginalRevolutionUniversity
Thank You and Take Care
Problem 3 2|] oints Sales Ti! Incidence Draw a new graph using the ctional data from #1 make sure it covers most of a page. 0n this problem, you will analyze a possible tax on electric cars. Start by analysing the tax using the graphical method [a-d}, then use the elasticity method (e-b]. It's ne if your visual estimates based on the graph don"t exactly match the values you get using elasticities. Demand for elecn'ic sedans IIEE_ mono a} What's the equilibrium price and quantity of electric sedans? b} Suppose the government imposed a tax of $lllill per electric sedan. Show the effect of the tax increase on the graph. c} What's the new price that consumers will pay? How much will producers receive after the tax? d} How much of the S ltltlll tax will be paid by consumers? Producers? Now use the elasticity method to answer the same questions. Your answers probably won't be exactly the same as the answers you got from the graph, but theyr should be somewhat close. e} Calculate the price elasticity of demand and supply using the midpoint formula. Use $3,- as PI and S as P2. Show your work. t] Using the elasticities. how much of the $l, tax will be paid by consumers? How much will be paid by producers. g} Find the new price that consumers will pay? b} How much will producers receive per car after the tax? Let's think about the tax revenue collected by the government. i} 1|What would happen to the number of electric cars sold? Use either the graph or elasticity to estimate the new equilibrium quantity. How much tax revenue will this tax generate? Show tax revenue on yoilr graph for full credit, with areas representing tax paid by consumers and producers clearly labeled. Problem-l 5 ints Anal 'n asnbsi Gk, we haven't covered subsidies, but if you understand how to analyze sales taxes, you shon be able to apply the same logic to subsidies. To earn the last 5 points on this exam, I want to see if you can gure this one out. A subsidy is reallyjust a negative tax. We currentlyr have a subsidy {federal tax credit) on electric cars, so if a company receives $40,0llll from a consumer, the consumer gets some money back 'orn the govermnent and the price actually paid by consumers ends up lower than the price received by sellers. This video from Marginal Revolution University might help feel free to check Khan Academy, the textbook or other sources for help. Using the table from #3, either draw a new graph, or use the elasticities from to gure out how a $ l,lll federal subsidy on electric cars would affect buyers and sellers. You can show your work on the graph, or with the elasticiti, orjust explain your logic. Starting fmm the original equilibrium, gure out: a} The new price paid by consumers. b} The new price received by sellers. c} The new equilibritnn number of electric cars sold. d} How much the subsidy would cost the government
