Questions from General Economics

Q: The market for pizza is characterized by a downward sloping demand curve

The market for pizza is characterized by a downward sloping demand curve and an upward-sloping supply curve. a. Draw the competitive market equilibrium. Label the price, quantity, consumer surplus, an...

Q: Evaluate the following two statements. Do you agree? Why or

Evaluate the following two statements. Do you agree? Why or why not? a. “A tax that has no deadweight loss cannot raise any revenue for the government.” b. “A tax that raises no revenue for the govern...

Q: Consider the market for rubber bands. a. If this

Consider the market for rubber bands. a. If this market has very elastic supply and very inelastic demand, how would the burden of a tax on rubber bands be shared between consumers and producers? Use...

Q: How do the elasticities of supply and demand affect the deadweight loss

How do the elasticities of supply and demand affect the deadweight loss of a tax? Why do they have this effect?

Q: Why do experts disagree about whether labor taxes have small or large

Why do experts disagree about whether labor taxes have small or large deadweight losses?

Q: What happens to consumer and producer surplus when the sale of a

What happens to consumer and producer surplus when the sale of a good is taxed? How does the change in consumer and producer surplus compare to the tax revenue? Explain.

Q: Draw a supply-and-demand diagram with a tax on

Draw a supply-and-demand diagram with a tax on the sale of a good. Show the deadweight loss. Show the tax revenue.

Q: Sparkle is one firm of many in the market for toothpaste,

Sparkle is one firm of many in the market for toothpaste, which is in long-run equilibrium. a. Draw a diagram showing Sparkle’s demand curve, marginal-revenue curve, average-total-cost curve, and marg...

Q: Draw the supply and demand curves for cookies. If the government

Draw the supply and demand curves for cookies. If the government imposes a tax on cookies, show what happens to the price paid by buyers, the price received by sellers, and the quantity sold. In your...

Q: If the government doubles the tax on gasoline, can you be

If the government doubles the tax on gasoline, can you be sure that revenue from the gasoline tax will rise? Can you be sure that the deadweight loss from the gasoline tax will rise? Explain.