Question 3 - Taxation Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer purchased. (a) Draw a supply-and-demand diagram of the market for beer without the tax. Show the price paid by consumers, the price received by producers, and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by producers? (b) Now draw a supply-and-demand diagram for the beer market with the tax. Show the price paid by consumers, the price received by producers, and the quantity of beer sold. What is the difference between the price paid by consumers and the price received by producers? Has the quantity of beer sold increased or decreased? (c) Can you identify any government revenues?

Question 25 The burden of a tax on a good is said to fall completely on the producers if the: a. wages received by workers who produce the good increase by the amount of the tax. b. price paid by consumers for the good increases by the amount of the tax. c. price paid by consumers does not change. d. price paid by consumers for the good declines by the amount of the tax.

Question 5 Suppose that the government imposes a tax on cigarettes. Use the diagram below to answer the questions. D is the demand curve before tax, S is the supply curve before tax and St is the supply curve after the tax. Price 18 12 10 10 12 Qua (a) For the market for cigarettes without the tax. Indicate: Price paid by consumers (1) Price paid by producers (ii) Quantity of cigarettes sold (iv) Buyer's reservation price (v) Seller's reservation price Seller's reservation price Choose. + Choose. + Choose. Price paid by consumers Choose. + 12 18 Quantity of cigarettes sold Choose. 10 7 Buyer's reservation price 3 Choose. 8 Price paid by producers Choose.

Attached is a graph diagram depicting the market for soft drinks. If an excise tax equal to $1 per liter is levied on soft drink sellers, please answer the following questions: a. The new equilibrium quantity of soft drinks bought and sold would be ___________ million liters. b. The new equilibrium price paid by buyers of soft drinks would be $__________ per liter. c. The new equilibrium price received by sellers (after-tax) would be $__________ per liter.