The government is considering levying a tax of $80 per unit on suppliers of either leather jackets or smartphones. The s

[answerhappygod]

The Government Is Considering Levying A Tax Of 80 Per Unit On Suppliers Of Either Leather Jackets Or Smartphones The S 1 (30.42 KiB) Viewed 19 times

The Government Is Considering Levying A Tax Of 80 Per Unit On Suppliers Of Either Leather Jackets Or Smartphones The S 2 (35.81 KiB) Viewed 19 times

The Government Is Considering Levying A Tax Of 80 Per Unit On Suppliers Of Either Leather Jackets Or Smartphones The S 3 (26.2 KiB) Viewed 19 times

The Government Is Considering Levying A Tax Of 80 Per Unit On Suppliers Of Either Leather Jackets Or Smartphones The S 4 (33.46 KiB) Viewed 19 times

The Government Is Considering Levying A Tax Of 80 Per Unit On Suppliers Of Either Leather Jackets Or Smartphones The S 5 (21.83 KiB) Viewed 19 times

The government is considering levying a tax of $80 per unit on suppliers of either leather jackets or smartphones. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for leather jackets is shown by Dr (on the first graph), and the demand for smartphones is shown by Ds (on the second graph). Suppose the government taxes leather jackets. The following graph shows the annual supply and demand for this good. It also shows the supply curve (S+Taz) shifted up by the amount of the proposed tax ($80 per jacket). On the following graph, use the green rectangle (triangle symbols) to shade the area that represents tax revenue for leather jackets. Then use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. set) 240 220 200 180 100 Leather Jackets Market S Tax Supply 17 Tax Revenue
PRICE (Dollars per jacket) 240 220 200 180 + 160 140 120 100 80 60 - 20 40 + 0 + 0 50 Leather Jackets Market S+Tax Supply DL 100 150 200 250 300 350 400 450 500 550 600 QUANTITY (Jackets) Tax Revenue Deadweight Loss
Instead, suppose the government taxes smartphones. 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 proposed tax ($80 per phone). On the following graph, do for smartphones the same thing you did previously on the graph for leather jackets. Use the green rectangle (triangle symbols) to shade the area that represents tax revenue for smartphones. Then, use the black triangle (plus symbols) to shade the area that represents the deadweight loss associated with the tax. E (Dollars per phone) 240 220 200 150 160 140 100 Smartphones Market S+Tax Supply Tax Revenue Deadweight Loss
PRICE (Dollars per phone) 240 220 200 180 160 140 120 100 80 60 40 20 0 0 50 Smartphones Market S+Tax Ds Supply 100 150 200 250 300 350 400 450 500 550 600 QUANTITY (Phones) Tax Revenue + Deadweight Loss
Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals. Deadweight Loss (Dollars) If the Government Taxes... Leather jackets at $80 per jacket Smartphones at $80 per phone Tax Revenue (Dollars) Suppose the government wants to tax the good that will generate more tax revenue at a lower welfare cost. In this case, it should tax because, all else held constant, taxing a good with a relatively elastic demand generates larger tax revenue and smaller deadweight loss. Grade It Now Save & Continue Continue without saving