The government of a state has been experiencing an increase in number of obesity cases. Research...

The government of a state has been experiencing an increase in number of obesity cases. Research suggests an increase in consumption of a particular fast food item is responsible for high number of obesity cases. As a result, the government of that State is considering an imposition of $1 tax. Monthly demand and supply for this good are QD=21-1P and QS= -1+1P respectively.

a) Draw the demand and Supply curve for fast food before the tax is imposed. Calculate the

equilibrium price and quantity, consumer and producer surplus, and label them on the graph.
b) Calculate the price elasticity of demand and supply for fast food. If the State government

imposes a tax, who will bear the most of the burden of the tax?
c) Suppose that the State government finally imposes a $1 tax on fast food. What will the new

equilibrium price and quantity? Include the tax on your graph. Calculate the consumer and

producer surplus and label them on the graph.
d) Is there any deadweight loss resulting from the tax on that good? If so, calculate it and if not,

explain? Would you personally advice the State government to impose the tax or not?

Expert Solution

Rahul Sunny answered 2 years ago

The government of a State has been experiencing an increase in number of obesity cases. Research...

The government of a State has been experiencing an increase in number of obesity cases. Research suggests an increase in consumption of a particular fast food item is responsible for high number of obesity cases. As a result, the government of that State is considering an imposition of $1 tax. Monthly demand and supply for this good are QD=21-1P and QS= -1+1P respectively. (30 Pts) a) Draw the demand and Supply curve for fast food before the tax is imposed....

Number of new cases of obesity among college students in Saudi Arabia in 2019

PHC 131 Identify which study design is applicable for studying the following health outcomes and why? Number of new cases of obesity among college students in Saudi Arabia in 2019. – 2 marks The number of students with obesity who are physically active and the number of students with obesity who are physically inactive. – 2 marks Give two difference between descriptive and analytic cross-sectional study. – 1 mark

Coyote Cable has been experiencing an increase in cable service subscribers in recent months due to...

Coyote Cable has been experiencing an increase in cable service subscribers in recent months due to increased advertising and an influx of new residents to the region. The number of subscribers (in 1000s) for the last 16 months is as follows: Month Sales 1 9.8 2 10.6 3 12.2 4 12.1 5 12.8 6 15.2 7 17.6 8 14.5 9 15.9 10 19.6 11 22.2 12 20.8 13 23.1 14 21.7 15 23.5 16 25.9 a. ) What is...

Why in recent years has there been an increase in cases of Powassan transmission? What changes...

Why in recent years has there been an increase in cases of Powassan transmission? What changes in the virus or vector have occurred? What are the symptoms of infection?

The nurse recognizes that there has been an increase in the number of urinary tract infections...

The nurse recognizes that there has been an increase in the number of urinary tract infections on one unit of the rehabilitation facility. He heard about a new type of peri-care bath wipes. The nurse would like to conduct a study to see if the new peri-care wipes decrease the incidence of cystitis. 1. What are the independent and dependent variables in the study? 2. Define and list some extraneous variables in this study. 3. What is the difference between...

State and explain three reasons for potential government intervention in cases of market failure government intervention...

State and explain three reasons for potential government intervention in cases of market failure government intervention – provide an example for each of the three reasons you identify

Since January of 2002, there has been a marked increase in the number of claims against...

Since January of 2002, there has been a marked increase in the number of claims against these insurance policies. In response to these claims, the insurance companies have raised premiums. Consequently, the number of travelers selecting this insurance is decreasing, with customers choosing to bear the risk instead. Discuss why IEI is losing the customers, and how do we fix it without decreasing profits?

There has been a substantial increase in recent years of the number of lawsuits over negligence....

There has been a substantial increase in recent years of the number of lawsuits over negligence. Do you think many of these truly pass the “Reasonable Person” doctrine or not? Is this a positive direction for the Unites States to be heading? Please provide examples from your own experience and/or current events.

Assume the government has a balanced budget and that the economy is experiencing a period of...

Assume the government has a balanced budget and that the economy is experiencing a period of growth higher than predicted, tax receipts (collected) by the government are likely to A) increase and result in a budget deficit. B) decrease and result in a budget deficit. C) increase and result in a budget surplus. In 2016, the federal government spent $200 billion but collected $180 billion in taxes, therefore in 2016, the government accumulated A) a budget surplus of $20 billion....

Assume the government has a balanced budget and that the economy is experiencing a recession, the...

Assume the government has a balanced budget and that the economy is experiencing a recession, the tax revenue collected by the government is likely to ________, which would lead to a ________.

Question