Homework (Ch 08) My Home Keep the Highest / 5 Courses Attempts Catalog and Study Tools 4. The Laffer curve eductions in the activity that is being taxed, which has imp ications for revenue coll Rental Options To understand the effect of such a tax, consider the monthly market for vodka, which is shown on the following graph. College Success Tips Career Success Tips Use the graph input tool to help you questions. You will not be graded on any changes you make to this graph. ? Help Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Give Feedback Graph Input Tool Market for Vodka Quantity 80 Demand Price 60.00 Dollars per bottle (Dollars per bottle) 40.00 Dollars per bottle) 20.00 PRICE (Dollars per bottle) 25 40 60 80 108 120 140 180 180 209 QUANTITY (Bottles ) Suppose the government imposes a $20-per bottle tax on suppliers. At this tax amount, the equilibrium quantity of vodka is bottles, and the government collects $ Now calculate the govern anue if it sets a tax of $0, $20, $40, $50, $60, $80, or $100 per bottle. (Hint: To find the equilibrium quantity after the tax, adjust the "Quantity" field until the Tax equals the er-unit tax.) Using the data you generate, plot a Laffer curve by using he 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 2800 3200 Laffer Curve 2800 2400 TAX REVENUE (Dollars) 2000 1800 1200 400 30 40 50 TAX (Dollars per bottle Suppose the government is currently imposing a $60-per-bottle tax on vodka. True or False: The government can raise its tax revenue by decreasing the per unit tax on vodka. True False Consider the deadweight loss generated in each of the following cases: no tax, a tax of $40 per bottle, and a tax of $80 per bottle. 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 taQUANTITY B Courses Catalog and Study Tools College Success Tips and the gover in tax revenue At this tax amo quantity of vodka Career Success Tips late the go mant's tax rev que if it sets a tax of $0, $20, $40, $50, $60, $80, or $100 per bottle. ( Hint: To find the equilibrium quantity Help after the tax , adjust the "Quantity" field und the wait the value of the per unit tax ) Using the data you generate, plot a Laffer curve by using Give Feedback bin's ( triangle symbol ) to plot total for rex note: Plot your points in the order in which you would like them connected Line se nts will connect the points automatically Laffer Curve TAX REVENUE (Dollam) TAX (Dollars per botte) ppose the government is currently imposing a $60-perbottle tax on vodka. True or False: The government can raise its tax revenue by decreasing the per-unit tax on vodka. True False Consider the deadweight tax of $40 per bottle, and a tax of $80 per bottle. On the following graph, use the black c ases. (Hint Remember that the area of a viangle is equal to ; x Base x Height. In th mangle 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 ) eadweight Loss DEADWEIGHT LOSS (Dollars) 50 90 79 TAX (Dollars per bottle As the tax per bottle increases, deadweight loss