Question

In: Economics

The table below presents the annual market for sofas in Akron, Ohio. Suppose the state government...

The table below presents the annual market for sofas in Akron, Ohio. Suppose the state government imposes a $200 excise tax on every sofa sold to be paid by customers at the point of sale.

Market for Sofas

Price (dollars) Quantity of Sofas Demanded Quantity of Sofas Supplied Quantity of Sofas Demanded with Excise Tax
$1,240 160 260 10
1,180 190 240 40
1,120 220 220 70
1,060 250 200 100
1,000 280 180 130
940 310 160 160
880 340 140 190
820 370 120 220
760 400 100 250
700 430 80 280

Instructions: Enter your answers as a whole number.

a. Before the excise tax is imposed, what are the equilibrium price and quantity of sofas in Akron?

     P = $

     Q =  sofas

b. Including the excise tax, what is the new equilibrium price consumers pay for sofas after the tax is imposed?

     $

c. After the excise tax is imposed, what is the new equilibrium quantity of sofas?

      sofas

d. What is the total amount of revenue collected by the government from the excise tax on sofas?

     $

  

Solutions

Expert Solution

a) Equilibrium price = 1120

Equilibrium quantity = 220

b) Equilibrium price = 940

c) Equilibrium quantity = 160

d) Total revenue = 200*160 = 32000


Related Solutions

The table below presents the state-based returns of securities A and B, the risk-free security and...
The table below presents the state-based returns of securities A and B, the risk-free security and the market portfolio, where p is the probability of each state. Use the information therein to answer parts a and b. State p Security A Security B Risk-free security Market portfolio Recession 0.5 -4% 44% 2% -6% Normal 0.4 10% -10% 2% 20% Boom 0.1 40% -30% 2% 30% Calculate the expected return and its standard deviation of securities A and B. Suppose you...
The table below presents the state-based returns of securities A and B, the risk-free security and...
The table below presents the state-based returns of securities A and B, the risk-free security and the market portfolio, where p is the probability of each state. Use the information therein to answer parts a and b. State p Security A Security B Risk-free security Market portfolio Recession 0.5 -4% 44% 2% -6% Normal 0.4 10% -10% 2% 20% Boom 0.1 40% -30% 2% 30% Calculate the expected return and its standard deviation of securities A and B. Suppose you...
Table below presents the state-based returns of securities A and B, the risk-free security and the...
Table below presents the state-based returns of securities A and B, the risk-free security and the market portfolio, where pis the probability of each state. Use the information therein to answer parts aand b. State p Security A Security B Risk-free security Market portfolio Recession 0.5 -4% 48% 2% -6% Normal 0.4 10% -10% 2% 25% Boom 0.1 30% -30% 2% 30% Calculate the expected return and its standard deviation of securities A and B. Suppose you borrow $20,000 at...
The following table presents financial data from 2018 annual reports of six pharmaceuticals companies. The market...
The following table presents financial data from 2018 annual reports of six pharmaceuticals companies. The market value of equity for five companies is also given. All numbers are in millions of dollars. Novartis had a book value of $1,349 million in 2017. In addition, Novartis had 4,900 million shares outstanding throughout the year. Company Market value of equity Price/Book Sales revenue R&D Net Income Acme $8,096.71 5.6 $1,571.0 $307.0 $406.0 Aspen Pharma 1,379.00 3.6 152.0 101.0 15.0 Pfizer 2,233.60 4.6...
The enrollments of the 13 public universities in the state of Ohio are listed below. College...
The enrollments of the 13 public universities in the state of Ohio are listed below. College Enrollment University of Akron 26,106 Bowling Green State University 18,864 Central State University 1,718 University of Cincinnati 44,354 Cleveland State University 17,194 Kent State University 41,444 Miami University 23,902 Ohio State University 62,278 Ohio University 36,493 Shawnee State University 4,230 University of Toledo 20,595 Wright State University 17,460 Youngstown State University 12,512 (Round "Mean" and "Standard deviation" to the nearest whole number.) Click here...
The table below shows the average weekly wages​ (in dollars) for state government employees and federal...
The table below shows the average weekly wages​ (in dollars) for state government employees and federal government employees for 10 years. Construct and interpret a 95​% prediction interval for the average weekly wages of federal government employees when the average weekly wages of state government employees is ​$899. The equation of the regression line is y= 1.438x - 37.254 Wages (state) X 731 766 787 822 853 892 928 932 960 983 Wages (federal) Y 1,008 1.065 1,112 1,135 1,198...
a) Zena produces fresh flowers. She faces a perfectly competitive market. The table below presents her...
a) Zena produces fresh flowers. She faces a perfectly competitive market. The table below presents her cost schedule. Complete the table by calculating marginal cost (MC).(1 mark) Output(boxes) Total Cost(TC) Marginal cost(MC=∆TC/∆Q) 0 $100 10 190 20 250 30 360 40 490 50 640 b) If the market price of a box of fresh flower is $13, how much output will the firm produce to maximize the profit. Calculate her profit at that level of output. Show your work c)...
The table below provides details on three government bonds (annual coupon payment, par value = $100)...
The table below provides details on three government bonds (annual coupon payment, par value = $100) Term to maturity (years) Coupon rate (% pa) Yield-to-maturity (% pa) 1 9.6 8.52 2 6.0 8.87 3 10.0 8.98 Another 3-year government bond paying a coupon rate of 1% pa (annual coupon payment, par value = $100). Is the yield of this bond equal to 9%? Why or why not? justify with calculation. All these bonds are issued by the same government.
The data in the table below presents the hourly quantity of production for three lines of...
The data in the table below presents the hourly quantity of production for three lines of production processes over the first 4 days in XYZ Company. Answer the questions based on the Excel Output given below. Day Process 1 Process 2 Process 3 1 33 33 28 2 30 35 36 3 28 30 30 4 29 38 34 ANOVA: Single Factor SUMMARY Groups Count Sum Average Variance Process 1 4 120 30 4.66667 Process 2 4 136 34 11.3333...
The data in the table below presents the hourly quantity of production for three lines of...
The data in the table below presents the hourly quantity of production for three lines of production processes over the first 4 days in XYZ Company. Answer the questions based on the Excel Output given below. Day Process 1 Process 2 Process 3 1 33 33 28 2 30 35 36 3 28 30 30 4 29 38 34 ANOVA: Single Factor SUMMARY Groups Count Sum Average Variance Process 1 4 120 30 4.66667 Process 2 4 136 34 11.3333...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT