Show how the imposition of a tax on either the buyers

Assignment Help Business Economics
Reference no: EM13242114

Question 1 A newly formed dance group, Mega Max has released a single, Economexy. Assume that the download price for their new single is $1.20 and the number of downloads per day world-wide is 5,000. What will happen to the market for this single if the following four events occur: (i) The population of dance music fans decreases AND the productivity in the music production increases. (ii) Dance fans switch away from dance music to R&B music AND the price of MP3 players increases.

(iii) The number of other dance singles decreases AND income increases. (iv) One of the artist's in Mega Max is rumoured to have died AND the download price of rival group's Techno New Syd West's single, Bang, decreases substantially to $0.20. Each event (i, ii, iii and iv) occurs independently (ceteris paribus). For each of the following events, explain what will happen to the equilibrium price and the equilibrium quantity for the download of Economexy. For each part, you must:

  • draw an appropriately labeled diagram,
  • show the adjustment process from the original to the new equilibrium, and
  • a detailed written explanation of this adjustment process.

Question 2 A. Show how the imposition of a tax on either the buyers or sellers in a market has the same effect on equilibrium price and quantity. Make sure you use appropriate diagrams in your answer.

B. Assume that the demand and supply curves in a market for cigarettes are represented by the following equations: P = 200 - 0.5Q and P = 0.5Q. The government then decides to impose a tax of $20 per unit on sellers in this market. Assume that the market is already efficient prior to the imposition of the tax. (i) Calculate the equilibrium price and quantity before the imposition of the tax, and draw the demand and supply curves in this market, showing all relevant information. (ii) Show what the tax does to the market in the diagram drawn in (i). (iii) Calculate the equilibrium price and quantity after the imposition of the $20 per unit tax. (iv) Calculate the tax revenue collected by the government, and the tax incidence of this tax on buyers and sellers.

Question 3 Assume the production of coal involves the generation of a negative externality. i. Explain how the equilibrium level of output would be determined in the market for coal, assuming no attempt is made to internalise the externality. Is that equilibrium efficient? Use a diagram(s) as part of your explanation. ii. What is a Pigovian Tax? Explain how the imposition of a Pigovian Tax could alter the equilibrium in this market. How does the tax impact on the efficiency of this market? Use a diagram(s) as part of your answer. You are free to augment the diagram you used in (a) in your answer to (b). iii. What other solutions could be used to remedy this negative externality? You do not need to describe these remedies in detail.

Question 4 Assume that there are two categories of goods: protein shakes and all other products. A. Show using diagrams how a consumer's demand curve for protein shakes can be derived from an indifference map and a budget constraint diagram. Make sure you explain your answer in detail.

B. Using a different set of diagram/s deconstruct the price effect into the substitution effect and the income effect. Take note to define each effect.

Question 5 - Research Question A. What is the difference between accounting profit and economic profit? Why does the distinction between these two types of profit matter?

B. Briefly explain why some firms continue operating in the short run even if they are making losses.

C. Compare and contrast the number of firms, barriers to entry, the type of product sold and the available information or knowledge in the four different market structures. Provide one Australian example of each market structure.

Reference no: EM13242114

Questions Cloud

How to focus on legal reforms will impact on situation : Our politicians frequently discuss what we need to do with respect to immigration reforms in this country. Some critics, however, suggest that a focus on legal reforms will not impact the situation significantly
Explain what is the partial pressure of co2 : The combustion of ethanol, C2H6O (MW = 46.0 g/mol), produces CO2 (MW = 44.0 g/mol) and water (18.0 g/mol). In a lab experiment, the reaction occurs using 4.60 g of ethanol in a 1.00 L container at body temperature (310 K) and 0.970 atm according t..
What is its radius of curvature of particle : Assume the magnitude of the charge of particle is 100 mC, its mass is 0.03 g and its velocity is 2000 m/s, What is its radius of curvature of particle in the magnetic field
Develop a scatter diagram with price as independent variable : Develop a scatter diagram with price as the independent variable and what does the scatter diagram developed in part (a) indicate about the relationship between the two variables?
Show how the imposition of a tax on either the buyers : Assume that there are two categories of goods: protein shakes and all other products. A. Show using diagrams how a consumer's demand curve for protein shakes can be derived from an indifference map and a budget constraint diagram. Make sure you expla..
Compute the nuclear binding energy per mole of nuclei : Calculate the nuclear binding energy per mole of nuclei of and the binding energy per mole of nucleons for 31P. The required masses (g/mol) are: 1 1H = 1.00783; 1 0n = 1.00867; 31 15P = 30.97376
How deveopment will development will affect us net capital : Explain how this deveopment will development will affect U.S net capital outlfow. then explain how it will affect U.S net exports by using a fomula fromt eh chpater and by drawing a diagram.
Include an explanation of ethics in business : You are the manager of an accounting department and would like to hire another managerial accountant to focus on internal accounting. The CEO is not convinced that a managing accountant position is needed. Prepare a 1-2 page memo for the CEO on the f..
What is the mass of the drop : A small drop of oil is suspended motionless in the air by a uniform electric field that is directed upward and has a magnitude of N/C, What is the mass of the drop

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd