Suppose that the government imposes a tax on pizzerias of $1.50 per pizza sold.On the following graph, use the grey segment (star symbols) to show the tax wedge that forms at the new quantity sold because of the tax. Then usethe tan polygon (dash symbols) to indicate the tax revenue generated by this tax. Then use the green point (triangle symbol) to shade the area thatrepresents consumer surplus, and the purple point (diamond symbol) to shade the area that represents producer surplus. Finally, use the black point(plus symbol) to indicate the deadweight loss in this market. (Hint: If the value for any of these graphical objects is zero, leave that element on thepalette.)Price of Pizza (Dollars)109876543210Demand0123456 7Quantity of Pizza (Thousands)8910Tax WedgeSupply Tax RevenueAConsumer Surplus◇Producer SurplusC↓Deadweight Loss?2:03 PM Indicate whether each of the areas listed in the following table increased, decreased, or remained the same as a result of the tax.UnchangedConsumer SurplusProducer SurplusGovernment Tax RevenueDeadweight LossIf the tax were removed, pizza eaters and sellers would be better off, but the government would lose tax revenue. Suppose that consumers andproducers voluntarily transferred some of their gains to the government.True or False: All parties (including the government) could be made better off with this transfer than they were with a tax.O TrueIncreased DecreasedOFalse

An economy in equilibrium maximizes the producer and consumer surplus rate. However, if the…

Indicate whether each of the areas listed in the following table increased, decreased, or remained the same as a result of the tax. Increased Decreased Unchanged O Consumer Surplus Producer Surplus Government Tax Revenue Deadweight Loss If the tax were removed, pizza eaters and sellers would be better off, but the government would lose tax revenue. Suppose that consumers and producers voluntarily transferred some of their gains to the government. O True or False: All parties (including the government) could be made better off with this transfer than they were with a tax. O True O False

Indicate whether each of the areas listed in the following table increased, decreased, or remained the same as a result of the tax. Increased Decreased Unchanged O Consumer Surplus Producer Surplus Government Tax Revenue Deadweight Loss If the tax were removed, pizza eaters and sellers would be better off, but the government would lose tax revenue. Suppose that consumers and producers voluntarily transferred some of their gains to the government. O True or False: All parties (including the government) could be made better off with this transfer than they were with a tax. O True O False

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter5: Elasticity Of Demand And Supply

Section5.A: Appendix: Price Elasticity And Tax Incidence

Problem 3AQ

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