1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for blinkles (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 56.00 44.00 32.00 Demand B D Supply QUANTITY (Binkies)
1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for blinkles (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 56.00 44.00 32.00 Demand B D Supply QUANTITY (Binkies)
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:1. Understanding the implications of taxes on welfare
The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax
equilibrium. Suppose the government has just decided to impose a tax on this market, the grey points (star symbol) indicate the after-tax scenario.
PRICE (Dollars per blinkie)
56.00
44.00
32.00
Demand
1
B
D
Supply
QUANTITY (Binkies)
?
(6
Transcribed Image Text:Complete the following table, given the information presented on the graph.
Result
Value
Price consumers pay before tax
Equilibrium quantity after tax
Per-unit tax
In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply.
Concept
Consumer surplus before the tax is imposed
Deadweight loss after the tax is imposed
Producer surplus after the tax is imposed
A
B
с
O
1000
0
D
n
E
O
O
n
F
1
B
B
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