Consider the graph below, representing the market for apples. The graph contains the equilibrium of the market without a tax, and the equilibrium with a tax. Price of apples (per basket) Price paid by buyers w/tax Protox Price kept by sellers w/tax D With a tax Qax Qno tox Supply Demand Quantity of apples (baskets) Which of the following is false about consumer surplus? The surplus lost by buyers who no longer buy apples as a consequence of the tax is F. The surplus lost by buyers who continue to buy apples after the tax is imposed, but now pay more for them, is B. Consumer surplus with a tax is given by area A+B Consumer surplus without a tax is given by area A+B+F
Consider the graph below, representing the market for apples. The graph contains the equilibrium of the market without a tax, and the equilibrium with a tax. Price of apples (per basket) Price paid by buyers w/tax Protox Price kept by sellers w/tax D With a tax Qax Qno tox Supply Demand Quantity of apples (baskets) Which of the following is false about consumer surplus? The surplus lost by buyers who no longer buy apples as a consequence of the tax is F. The surplus lost by buyers who continue to buy apples after the tax is imposed, but now pay more for them, is B. Consumer surplus with a tax is given by area A+B Consumer surplus without a tax is given by area A+B+F
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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