Consider the market for electric scooters. The following graph shows the demand and supply for electric scooters before the government imposes anytaxes.First, use the black point (plus symbol) to indicate the equilibrium price and quantity of electric scooters in the absence of a tax. Then use the greenpoint (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamondsymbol) to shade the area representing total producer surplus (PS) at the equilibrium price.PRICE (Dollars per scooter)40036032028024020016012080400DemandSupplyBefore Tax0 120 240 360 480 600 720 840 960 1080 1200QUANTITY (Scooters)EquilibriumAConsumer Surplus>Producer Surplus(?)Suppose the government imposes an excise tax on electric scooters. The black line on the following graph shows the tax wedge created by a tax of$160 per scooter.First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade thearea representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producersurplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. PRICE (Dollars per scooter)400360320280240 Tax Wedge2001601208040Demand0Supply0 120 240 360 480 600 720 840 960 1080 1200QUANTITY (Scooters)Consumer SurplusProducer SurplusAfter TaxTax RevenueDeadweight LossBefore Tax(Dollars)00Tax RevenueComplete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumersurplus, producer surplus, tax revenue, and deadweight loss after the tax.Note: You can determine the areas of different portions of the graph by selecting the relevant area.After Tax(Dollars)AConsumer SurplusProducer SurplusDeadweight Loss?

The consumer surplus is usually, the amount the consumers pays, which is generally lower than the…

PRICE (Dollars per scooter) 400 360 320 280 240 Tax Wedge 200 160 120 80 40 Demand 0 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Scooters) Consumer Surplus Producer Surplus Supply Tax Revenue After Tax Deadweight Loss Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area. Before Tax (Dollars) 0 0 Tax Revenue After Tax (Dollars) Consumer Surplus Producer Surplus Deadweight Loss

PRICE (Dollars per scooter) 400 360 320 280 240 Tax Wedge 200 160 120 80 40 Demand 0 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Scooters) Consumer Surplus Producer Surplus Supply Tax Revenue After Tax Deadweight Loss Complete the following table by using the previous graphs to determine the values of consumer and producer surplus before the tax, and consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area. Before Tax (Dollars) 0 0 Tax Revenue After Tax (Dollars) Consumer Surplus Producer Surplus Deadweight Loss

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter4: Markets In Action

Section: Chapter Questions

Problem 1SQP

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