Taxes and Efriciency

Suppose the government is thinking about levying a per$-$unit tax of $$60$ on firms supplying either ski passes or subway tickets. The supply curves for both of the two goods are identical, as given by the following graphs. The demand for ski passes is qiven by $D_p($on the first graph$),$ and the demand for subway tickets is given by $D_{\text{I}}($on the second graph$).$

Suppose the government decides to taxx ski passes. The following graph plots the yearly demand and supply for this good. It also plots another supply curve $(S+$Tax $)$ shifted upward by the proposed tax amount $($ $$60$ per pass$).$

On the following graph, use the green rectangle $($triangle symbols$)$ to shade the area that represents tax revenue for ski passes. Then use the black triangle $($olus symbols$)$ to shade the area that represents the deadmoight loss assoclated with the tax.

Ski Passes Market

Supoose the government decides to tax subway tickets, instead. The folowing graph plocs the mearly supoly and demand ourves for this good, as mell as another supply curve shitted upward by the proposed tax amourt $($ $$60$ per ticket$).$

On the following graph, perform the same exercise that you did on the graph for skj passes. Use the green rectangle $($triangie symbais$)$ to shade the area that represents cax revenue for subway tickets. Then, use the black triangle $($plus symbobs$)$ to shade the area that represents che dedadweight Noss associated with the tax.

Complete the following table by entering the tax revenue collected and deadwelght loss caused by each of the two tax proposals.

$\backslash$table$[[$If the Government Taxes...,$\backslash$table$[[$Tax Revenue$],[($Dollars$)]],\backslash$table$[[$Deadweight Loss$],[($Dollars$)]]],[$Ski passes at $$60$ per pass,,$],[$Subway tickets at $$60$ per ticket,,$]]$

If the goal of the government is to impose the tax that is more efficient, it should tax burdens of the two tax laws are equal.$)$

$\_-($Hint: Assume the administrative

Taxes and Efriciency

Suppose the government is thinking about levying a per$-$unit tax of $$60$ on firms supplying either ski passes or subway tickets. The supply curves for both of the two goods are identical, as given by the following graphs. The demand for ski passes is qiven by $D_p($on the first graph$),$ and the demand for subway tickets is given by $D_{\text{I}}($on the second graph$).$

Suppose the government decides to taxx ski passes. The following graph plots the yearly demand and supply for this good. It also plots another supply curve $(S+$Tax $)$ shifted upward by the proposed tax amount $($ $$60$ per pass$).$

On the following graph, use the green rectangle $($triangle symbols$)$ to shade the area that represents tax revenue for ski passes. Then use the black triangle $($olus symbols$)$ to shade the area that represents the deadmoight loss assoclated with the tax.

Ski Passes Market

Supoose the government decides to tax subway tickets, instead. The folowing graph plocs the mearly supoly and demand ourves for this good, as mell as another supply curve shitted upward by the proposed tax amourt $($ $$60$ per ticket$).$

On the following graph, perform the same exercise that you did on the graph for skj passes. Use the green rectangle $($triangie symbais$)$ to shade the area that represents cax revenue for subway tickets. Then, use the black triangle $($plus symbobs$)$ to shade the area that represents che dedadweight Noss associated with the tax.

Complete the following table by entering the tax revenue collected and deadwelght loss caused by each of the two tax proposals.

$\backslash$table$[[$If the Government Taxes...,$\backslash$table$[[$Tax Revenue$],[($Dollars$)]],\backslash$table$[[$Deadweight Loss$],[($Dollars$)]]],[$Ski passes at $$60$ per pass,,$],[$Subway tickets at $$60$ per ticket,,$]]$

If the goal of the government is to impose the tax that is more efficient, it should tax burdens of the two tax laws are equal.$)$

$\_-($Hint: Assume the administrativ

The blank options are ski passes$/$subway tickets. Please help answer each part