HW5ak - Homework 1. Suppose the market for widgets is given...

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Homework 1. Suppose the market for widgets is given below: 2500 5000 7500 10000 12500 15000 17500 20000 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 Demand Supply Tax Revenue DWL A. A. If a tax of $0.30 is imposed per widget, identify: i. The new quantity, price consumers pay and the price suppliers receive Q = 7500, Pc = $0.60, Ps = 0.30 ii. Calculate and shade Tax Revenue Tax Revenue is $0.30*7500 iii. Shade in the area representing the DWL B. If a tax of $0.15 is imposed per widget, identify: 1
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5000 7500 10000 12500 15000 17500 20000 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 Demand Supply Tax Revenue DWL i. B. If a tax of $0.15 is imposed per widget, identify: i. The new quantity, price consumers pay and the price suppliers receive Q = 10000, Pc= $0.55 (about), Ps = $0.40 ii. Calculate and shade Tax Revenue TR = 0.15*10000 iii. Shade in the area representing the DWL 2. Consider the following market: Suppose a subsidy of $0.30 per unit is given. Identify: i. The new quantity, price consumers pay and the price suppliers receive Q = 70, Pc =$0.30, Ps =0.60 ii. Calculate and shade CS and PS. 2
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This note was uploaded on 02/20/2012 for the course ECON 221 taught by Professor Gordanier during the Fall '08 term at South Carolina.

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HW5ak - Homework 1. Suppose the market for widgets is given...

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