Question #1

2. Assume that the government of Unlario imposes an excise tax of $2.00 per canon of cigarettes. After this tax, the equilibrium price increases from Slim] a carton lo $13.5 a carton. and the equilibrium quantity decreases from ll cartons to 95'!) cartons per week. i. Illustrate the effect that this tax will have on the supply and demand for cigarettes in Ontario. II. a} How much money did the cigarette proMoere eern m BEFORE the tax? it} How mueh money do the eigarette produeere earn p_er eottte AFTER the tart\"? e] How mueh tax does the qoeemment mine from the entire market? d} How much of the mertettmt is raised from the producers. and how rruoh is raised from the consumers? 1. Assume that the government of Ontario imposes an excise tax of $213!] per bottle of wine. After this tax, the equilibrium price increases from $12.00 a bottle to $ 1311i] a bottle, and the equilibrium quantity decreases Front lilili] bottles to EDD bottles per week. i. Illustrate the effect that this tax will have on the supply and demand for wine in Untario. ii. a]: How much money did the wine producers earn Er bottle BEFORE the tax? b]: How much money do the wine producers eam Er bottle AFTER the tax? c} HDW much tax does the govemment raise from the entire rna ricer? d} How much of the market tax is raised from the producers, and how much is raised from the consumers? Producers: Consume rs