Answer the Following Questions Regarding Taxes

question 79

Essay

Answer the following questions regarding taxes.
a. Suppose the demand for insulin pumps is Q^D = 2,000 and the supply of insulin pumps is Q^S = 0.5P - 1,000. What is the price that sellers receive per pump? Suppose the government imposes a tax of $400 per pump on sellers. What after-tax price per pump do sellers receive?
b. In the market for organic fruit, the elasticity of supply is 0.75 and the elasticity of demand is -1.25. If there is a tax of $2 per unit on organic fruit, what share of the tax is paid by buyers and what share is paid by sellers?

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Definitions:

Transition State

A high-energy configuration of atoms during a chemical reaction that represents the point of highest energy along the reaction path.

Energy Difference

The variation in energy between two states, configurations, or levels, important in understanding chemical reactions and physical processes.

Gibbs Free Energy

A thermodynamic quantity representing the amount of usable energy in a system to perform work at constant temperature and pressure.

Equilibrium Constant

A numerical value that represents the ratio of concentrations of products to reactants at equilibrium in a chemical reaction.