Answer Happy

Refer to the interactive below. Tax Burden On Reset II. GRAPH Tax Burden SETTINGS (5) Price Tax imposed on: Supply Demand 90 $90.00 Excise Tax (0 - $20) 15.00 80 70 S Demand Perfectly Inelastic 60 Relatively Elastic a me a sama 9 50 Relatively Elastic 40 Supply Less Elastie 30 Perfectly Elastic $30.00 Relatively Elastic 20 D 10 CALCULATIONS D-T 6.0 7.0 0 1.0 2.0 3.0 4.0 5.0 8.0 9.0 Quantity (thousands per week) Price Paid Quantity No Tax $50.00 4,000 With Tax $60.00 3,000
Instructions: Adjust the sliders so that the vertical intercept of the supply curve is $30 and the demand curve is perfectly inelastic, Click the Tax Burden switch above the graph to On. Make additional modifications to the interactive tool as indicated to answer the following questions a) if there is no tax, the equilibrium price is $50. a $15 tax paid on sellers is implemented, the buyer will pay $ 45 and the burden of the tax is entirely paid by buyers b) Suppose the demand curve gradually changed to become more elastic with the original equilibrium remaining at (QP) = (4000, $50) and no change to the supply curve. Complete the following statements that describe the effects of this change in demand elasticity. The quantity bought and sold does not change decreases and then increases increases decreases increases and then decreases The government's revenue decreases decreases and then increases O increases and then decreases O does not change O Increases The consumers' share of the tax burden, measured as percentage of government's revenue derived from consumers, increases • decreases O does not change Odecreases and then increases increases and then decreases 1) The producers' share of the tax burden, measured as percentage of government's revenue derived from producers, decreases increases Odoes not change Increases and then decreases O decreases and then increases