any taxes.First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags 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 handbag)400200240PRICE (Dollars per handbag)2001601201804002 2 2 2 2 2 2 8 8 9400360320200200DemandSuppose the government imposes an excise tax on designer handbags. The black line on the following graph shows the tax wedge created by a tax of$160 per handbag.160First, 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.240 Tax Wedge120DSupplygs. The following grapn shows the demand and supply for designer handbags before the government impose0 120 240 360 480 600 720 840 960 1080 1200QUANTITY/thanaDemandBefore TaxSupplyEquilibriumΔAfter TaxConsumer Surplus◇Producer SurplusTax RevenueAConsumer Surplus●Producer SurplusDeadweight Loss(? PRICE (Dolla16012080400Supply0 120 240 360 480 600 720 840 960 1080 1200QUANTITY (Handbags)Consumer SurplusProducer SurplusTax RevenueDeadweight LossComplete 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.Before Tax(Dollars)00Producer SurplusAfter Tax(Dollars)Deadweight Loss

Consumer surplus is a measure of consumer well-being arises from purchasing a product. It arises as…

PRICE (Dolla 120 80 40 0 Supply 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Handbags) Consumer Surplus Producer Surplus Tax Revenue 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. Deadweight Loss Before Tax (Dollars) 0 0 Producer Surplus After Tax (Dollars) Deadweight Loss

PRICE (Dolla 120 80 40 0 Supply 0 120 240 360 480 600 720 840 960 1080 1200 QUANTITY (Handbags) Consumer Surplus Producer Surplus Tax Revenue 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. Deadweight Loss Before Tax (Dollars) 0 0 Producer Surplus After Tax (Dollars) Deadweight Loss

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A state tax on portable electronic devices causes sales of a single model of a handheld calculator to decrease from 80 to 70 per week. The tax is assessed as a tax on sellers when they receive the units from suppliers. Drag the appropriate curves (including the Quantity curve) to show the effects on the market. To refer to the graphing tutorial for this question type, please click here. Price (S) 100 100 Quant 140 130 120 110 100 GO 80 80 70 00 00 40 30 20 10 80 Quantity (per week) What tax revenue will the state collect from sales of this one model of calculator through the new tax? The tax revenue is $ per week.
First, use the black point (plus symbol) to indicate the equilibrium price and quantity of designer handbags in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. PRICE (Dollars per handbag) 500 450 400 Demand 350 300 250 200 Before Tax Supply 150 100 50 0 0 160 320 480 640 800 960 1120 1280 1440 1600 QUANTITY (Handbags) + Equilibrium Consumer Surplus Producer Surplus ?
Suppose now that the government decides to increase the number of quotas available to 72 units , but it keeps the price support at the current level of $72 calculate the consumer surplus
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