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CIVETEVIA ( www 2. Taxes and welfare Consider the market for electric scooters. The following graph shows the demand and supply for electric scooters before the government imposes any 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 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 scoo 340 320 290 240 100 120 40 0 PRICE (Dollars per scooter) 0 20 40 Show Transcribed Text 400 300 320 240 200 Demand 160 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 $80 per scooter NO 40 First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. ? @ Before Tax Demand Supply 80 QUANTITY (Scooters) Tax Wedge 0 20 4060 After Tax Equilibrium A Supply 80 100 100 130 140 160 180 200 QUANTITY (Scooters) Consumer Surplus ♦ Producer Surplus Tax Revenue A Consumer Surplus ? Producer Surplus Deadweight Loss

CIVETEVIA ( www 2. Taxes and welfare Consider the market for electric scooters. The following graph shows the demand and supply for electric scooters before the government imposes any 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 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 scoo 340 320 290 240 100 120 40 0 PRICE (Dollars per scooter) 0 20 40 Show Transcribed Text 400 300 320 240 200 Demand 160 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 $80 per scooter NO 40 First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. ? @ Before Tax Demand Supply 80 QUANTITY (Scooters) Tax Wedge 0 20 4060 After Tax Equilibrium A Supply 80 100 100 130 140 160 180 200 QUANTITY (Scooters) Consumer Surplus ♦ Producer Surplus Tax Revenue A Consumer Surplus ? Producer Surplus Deadweight Loss

Survey Of Economics
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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TIVITEITA TO 2. Taxes and welfare Consider the market for electric scooters. The following graph shows the demand and supply for electric scooters before the government imposes any taxes. 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 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 400 360 320 280 240 200 160 120 80 40 0 PRICE (Dollars per scooter) 0 20 40 400 360 Show Transcribed Text 320 200 240 200 160 120 80 Demand 40 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 $80 per scooter. 0 First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. 0 60 Demand Before Tax Supply Tax Wedge 20 40 80 100 120 140 160 QUANTITY (Scooters) 160 180 200 After Tax 3 Supply •+ Equilibrium 60 80 100 120 140 160 180 200 QUANTITY (Scooters) A Consumer Surplus Producer Surplus Tax Revenue A Consumer Surplus Producer Surplus Deadweight Loss
Transcribed Image Text:TIVITEITA TO 2. Taxes and welfare Consider the market for electric scooters. The following graph shows the demand and supply for electric scooters before the government imposes any taxes. 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 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 400 360 320 280 240 200 160 120 80 40 0 PRICE (Dollars per scooter) 0 20 40 400 360 Show Transcribed Text 320 200 240 200 160 120 80 Demand 40 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 $80 per scooter. 0 First, use the tan quadrilateral (dash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. 0 60 Demand Before Tax Supply Tax Wedge 20 40 80 100 120 140 160 QUANTITY (Scooters) 160 180 200 After Tax 3 Supply •+ Equilibrium 60 80 100 120 140 160 180 200 QUANTITY (Scooters) A Consumer Surplus Producer Surplus Tax Revenue A Consumer Surplus Producer Surplus Deadweight Loss
PRICE (Dollars per sco 240 200 100 120 80 40 O 0 Tax Wedge 20 Supply Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss 40 60 80 100 120 140 100 180 200 QUANTITY (Scooters) Before Tax (Dollars) 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. 0 0 Consumer Surplus After Tax (Dollars) ◇ Producer Surplus Deadweight Loss
Transcribed Image Text:PRICE (Dollars per sco 240 200 100 120 80 40 O 0 Tax Wedge 20 Supply Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss 40 60 80 100 120 140 100 180 200 QUANTITY (Scooters) Before Tax (Dollars) 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. 0 0 Consumer Surplus After Tax (Dollars) ◇ Producer Surplus Deadweight Loss
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