Ch 8: Practice Sheet 2Figure 8-5Price922161. Refer to Figure 8-5 above. What happens to consumer surplus when a tax is imposed in this market?a. It falls by $900b. It falls by $1800c. It falls by $2,700 d. It falls by $3,6002. Refer to Figure 8-7 below. A tax levy forced consumers to pay a price of $18 per unit. What is tax rate (size) imposedin this market?a. $10²00b. $18c. 58d. $123. Refer to Figure 8-7 below. After the tax levy, the burden of tax on consumers isa. $18b. $10c. $8d. 564. Refer to Figure 8-7 below. After the tax levy, the burden of tax on producers isa $10b. $8c. 56d. 54Ga5. Refer to Figure 8-7. One effect of the tax is toa. reduce consumer surplus from $60 to $24.c. create a deadweight loss of $24.6. Refer to Figure 8-7. One effect of the tax is toa. reduce the quantity demanded from 8 to 4.c. create a tax revenue of $40.10SupplyDemand14 16 2b. reduce producer surplus from $32 to $8.d. All of the above are correct.b. reduce the quantity supplied from 8 to 4.d. All of the above are correct.

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Answered: Figure 8-5 1. Refer to Figure 8-5…

Figure 8-5 1. Refer to Figure 8-5 above. What happens to consumer surplus when a tax is imposed in this market? a. It falls by $900 b. It falls by $1800 c. It falls by $2,700 d. It falls by $3,600

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Ch 8: Practice Sheet 2
Figure 8-5
Price
922
16
1. Refer to Figure 8-5 above. What happens to consumer surplus when a tax is imposed in this market?
a. It falls by $900
b. It falls by $1800
c. It falls by $2,700 d. It falls by $3,600
2. Refer to Figure 8-7 below. A tax levy forced consumers to pay a price of $18 per unit. What is tax rate (size) imposed
in this market?
a. $10
²00
b. $18
c. 58
d. $12
3. Refer to Figure 8-7 below. After the tax levy, the burden of tax on consumers is
a. $18
b. $10
c. $8
d. 56
4. Refer to Figure 8-7 below. After the tax levy, the burden of tax on producers is
a $10
b. $8
c. 56
d. 54
G
a
5. Refer to Figure 8-7. One effect of the tax is to
a. reduce consumer surplus from $60 to $24.
c. create a deadweight loss of $24.
6. Refer to Figure 8-7. One effect of the tax is to
a. reduce the quantity demanded from 8 to 4.
c. create a tax revenue of $40.
10
Supply
Demand
14 16 2
b. reduce producer surplus from $32 to $8.
d. All of the above are correct.
b. reduce the quantity supplied from 8 to 4.
d. All of the above are correct.

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