On the planet Economus, there are only two goods in the economy. One of the goods is econoapples. The supply of econoapples is:
= 30 + P_A -
P_S. The second type of good is the econoseed. The supply of econoseeds is:
= 60 - P_A + P_S. The demand for econoapples is:
= 15 - 2 P_A + 4 P_S. The demand for econoseeds is:
= 45 + P_A - P_S. Determine the equilibrium price and quantity of each good in the Economus economy. Suppose the world government of Economus implements a $1 tax on econoapples. Do econoapple consumers suffer any burden of the tax? Are econoseed consumers affected by the econoapple tax? How much tax revenue does the tax policy generate?

Question

On the planet Economus, there are only two goods in the economy. One of the goods is econoapples. The supply of econoapples is:

= 30 + P_A -

P_S. The second type of good is the econoseed. The supply of econoseeds is:

= 60 - P_A + P_S. The demand for econoapples is:

= 15 - 2 P_A + 4 P_S. The demand for econoseeds is:

= 45 + P_A - P_S. Determine the equilibrium price and quantity of each good in the Economus economy. Suppose the world government of Economus implements a $1 tax on econoapples. Do econoapple consumers suffer any burden of the tax? Are econoseed consumers affected by the econoapple tax? How much tax revenue does the tax policy generate?

Quizplus · Accepted Answer

The Answer of On the planet Economus, there are only two goods in the economy. One of the goods is econoapples. The supply of econoapples is: = 30 + P_A - P_S. The second type of good is the econoseed. The supply of econoseeds is: = 60 - P_A + P_S. The demand for econoapples is: = 15 - 2 P_A + 4 P_S. The demand for econoseeds is: = 45 + P_A - P_S. Determine the equilibrium price and quantity of each good in the Economus economy. Suppose the world government of Economus implements a $1 tax on econoapples. Do econoapple consumers suffer any burden of the tax? Are econoseed consumers affected by the econoapple tax? How much tax revenue does the tax policy generate?

On the Planet Economus, There Are Only Two Goods in the Economy