Buyers seller tax burden per jacket elasticity the

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Applied Calculus
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Chapter 10 / Exercise 67
Applied Calculus
Berresford/Rockett
Expert Verified
Buyers Seller Tax burden ($ per jacket) Elasticity The burden of the tax falls more heavily on the __________ side of the market. On the graph, shade the area that represents tax revenue. Then shade the area that represents the deadweight loss associated with the tax. Suppose the government were to tax smart phones. The following graph shows the annual supply and demand for this good, as well as the supply curve shifted up by the amount of the tax. On the following graph, again use the green rectangle (triangle symbols) to shade the area that represents tax revenue. Then
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Applied Calculus
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Chapter 10 / Exercise 67
Applied Calculus
Berresford/Rockett
Expert Verified
use the black triangle (X symbols) to shade the area that represents the deadweight loss associated with the tax. If the government taxes leather jackets, it receives _____________ in tax revenues and causes _____________ of deadweight loss. If it taxes smart phones, it receives________ in tax revenues and causes _____________ of deadweight loss. Therefore, if the government wants to get more tax revenue with less deadweight loss, it should tax _______________________. This is because, all else being equal, taxes on a good with relatively ___________ price elasticity of demand generate more tax revenue and less deadweight loss. Answer: 1. $5; $8; $1 2. Quantity sold Price buyers pay Price sellers receive Before tax 300 120 120 After tax 100 140 40 Buyers Seller Tax burden ($ per jacket) 20 80 Elasticity 6.5 1 sellers’ side; 10000; 10000; 25000; 2500; smart phones; lower;
Lecture 10 International trade 1. International Trade: Export & Import What determines whether a country imports or exports a good? Equilibrium Without Trade we assume: A country is isolated from rest of the world and produces steel. (Autarky economy) The market for steel consists of the buyers and sellers in the country. No one in the country is allowed to import or export steel. If the country decides to engage in international trade, will it be an importer or exporter of steel? The effects of free trade can be shown by comparing the domestic price of a good without trade and the world price of the good. The world pricerefers to the price that prevails in the world market for that good. 1.1 International Trade in an Exporting Country Change in equilibrium Change in efficiency: who win and who lose? How’s the economic well-being of the nation as a whole? 1.2 International Trade in an importing country Change in equilibrium
Change in efficiency: who win and who lose? How’s the economic well-being of the nation as a whole? 2. Tariff A tariff is a tax on goods produced abroad and sold domestically. Tariffs raise the price of importedgoods above the world price by the amount of the tariff. Welfare analysis 3. The Lessons for Trade Policy Other Benefits of International Trade Increased variety of goods Lower costs through economies of scale Increased competition Enhanced flow of ideas The Arguments for Restricting Trade Jobs National Security Infant Industry
Unfair Competition Protection-as-a-Bargaining Chip Review questions: 1. The before-trade domestic price of pineapple in the United States is $500 per ton. The world price of

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