First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fans 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 perfan) 200 180 PRICE (Dollars per fan) 140 120 100 60 40 20 0 200 180 160 140 120 100 80 Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of $40 per fan. 60 Demand 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. 40 0 100 200 0 Demand Tax Wedge Before Tax Supply 300 400 500 600 700 800 900 1000 QUANTITY (Fans) Consumer Surplus Producer Surplus Tax Revenue 0 100 200 300 400 500 600 700 800 900 1000 QUANTITY (Fans) Deadweight Loss After Tax Supply + Equilibrium A 0 0 Consumer Surplus After Tax (Dollars) Producer Surplus 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. Tax Revenue A Consumer Surplus Note: You can determine the areas of different portions of the graph by selecting the relevant area. Before Tax (Dollars) Producer Surplus Deadweight Loss (?)

The following graph represents the demand and supply for blinkies (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the after-tax scenario. PRICE (Dollars per blinkie) 26.00 18.00 10.00 Demand Result Per-unit tax B D F 33 U 20 E 36 QUANTITY (Blinkies) Complete the following table, given the information presented on the graph. $ Price consumers pay before tax $ Equilibrium quantity before tax Supply Value In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept Producer surplus after the tax is imposed Consumer surplus after the tax is imposed Tax revenue after the tax is imposed A U B 0 0 с 0 0 D 0 0 E 0 F 0 0

In the market for candy, researchers have estimated the following demand and supply curves.  Demand: P= 8 - Q/100 Supply:    P=  (3Q)/700 If the government imposes an excise tax of $0.50 per unit. What is tax revenue out of this tax? (Remember that the tax does not change the demand and supply curves).

Consider the market for BP gasoline. If the market has a very elastic supply and a very inelastic demand, how would the burden of a tax on BP gasoline be shared between producers and consumers? Draw a graph to support your answer.