Exploring Economics
8th Edition
ISBN: 9781544336329
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Question
Chapter 7, Problem 9P
To determine
(a)
The area of
To determine
(b)
The area of consumer surplus and producer surplus if the $T tax is imposed.
To determine
(c)
The deadweight cost of the tax.
To determine
(d)
The tax revenue which is raised from the tax.
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Students have asked these similar questions
Assume competitive markets (prices are given) and that the demand is more elastic than supply. Which of the following statements is correct?
A. We do not have sufficient information to infer which surplus is greater
B. Consumer surplus will be larger than producer surplustyping
C. Consumer surplus will be exactly the same as producer surplus
D. Consumer surplus will be smaller than producer surplus.
Give typing answer with explanation and conclusion
Review the graph at right for a competitive market
How much is the consumer surplus?
Consumer surplus is $x (round your answer to two decimal places).
How much is the producer surplus?
Producer surplus is $x (round your answer to two decimal places)
How much is the total surplus in this market?
Total surplus is $x (round your answer to two decimal places).
100-
90-
80-
70-4
60-
50-145
40-
30-
20-
10-
Price
0
45
50 60 70 80
Quantity
10 20 30 40
D
MC
90 100
Use the graph to answer the following question:
Which of the following statements is most true?
A) Producers will pay the entire tax.
B) Consumers will pay 1/3 of the tax.
C) Producers will pay 1/3 of the tax.
D) Consumers will pay the entire tax.
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