Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose the government increases the excise tax on gas by $0.2. The eqilibrium price was $1.00 and the equilibrium quanitity sold was 5 millions gallons

Suppose the government increases the excise tax on gas by $0.2. The eqilibrium price was $1.00 and the equilibrium quanitity sold was 5 millions gallons before taxes increased. The new equilibrium price is $1.1 and the new equilibrium quanitity is 4 million gallons. Calculate the tax income for the government.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foundations of Mathematical Economics

Authors: Michael Carter

1st edition

262531925, 978-0262531924

More Books

Students also viewed these Economics questions

Question

Go, do not wait until I come

Answered: 1 week ago

Question

Make eye contact when talking and listening

Answered: 1 week ago