Refer to the following graph Price of apples (per basket No Tax Consumers Producers get this 700 Quantity of apples beskets) Price apples (per basket Supply Demand $2.45 1.45 With $1 Tax Consumers get this Producers get this b 500 The government gets this Tax No one gets this (deadweight Supply 700 Quantity of apples (baskets) The graph on the left is the market outcome with no tax on apples. The graph on the right is the market outcome with a $1.00 per basked of apples tax imposed. Who ends up bearing the greater burden of this tax once its imposed?

To answer Questions #1-3, refer to the following diagram, which shows the monthly cigarette market in Wake County, North Carolina and the demand for, and supply of, cigarettes before and after the imposition of a $5.00-dollar per unit excise tax. Exam 2, Figure1-The Wake County Market for Cigarettes Per Pack Price Supply with tax 20.00 Supply before tax 18.00 16.00 Demand 10.00 Quantity Per Year (Milions of Packs) Ceteris paribus, how much will the government collect in annual tax revenue from this tax? Select one: a. $5 million b. $10 million C. $15 million d. $20 million

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 scooter) 100 90 Demand 80 70 60 50 40 28 84 8 30 Supply 20 10 0 0 160 320 480 Before Tax 640 800 960 1120 1280 1440 1600 QUANTITY (Scooters) Equilibrium A Consumer Surplus Producer Surplus

The graph shows the market for game consoles. Suppose 1 million game consoles a year are being produced Draw the deadweight loss on game consoles. Suppose the quantity of game consoles produced is 1 million and the price is the equilibrium price Price (dollars per game console) 600- 500- 400- 300 300- Calculate the consumer surplus, producer surplus, and deadweight loss 200- The consumer surplus is $million 100- The producer surplus is $ million The deadweight loss is $million 3 Quantity (millions of game consoles per year) >>> Draw only the objects specified in the question

1. Here is the demand for coconuts: P              3             4             5            6           7           8           9           11           13           16           20 QD          1100      1000      900      800      700      600      500        400        300        200        100 And here is supply P              3             4             5             6             7            8            9            10          11           12             13 QS           100        200        300        400        500        600        700        800        900        1000       1100 Identify the equilibrium price, quantity, consumer and producer surplus and show them on a graph.  The graph should be pretty simple here, the main issue is finding the numbers for consumer and producer surplus.

The following graph shows the weekly market for handbags in some hypothetical economy. Suppose the government levies a tax of $23.20 per bag. The tax places a wedge between the price buyers pay and the price sellers receive. PRICE (Dollars per bag) 100 90 00 R 70 8 50 40 R20 10 0 10 Tax Wedge Supply Demand 20 30 40 50 00 70 QUANTITY (Bags of handbags) 00 00 100 C D

The following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. How many rides will be demanded after the introduction of the excise tax?     7 million     10 million     8 million     9 million

Identify at least one positive externality from running a donut shop. Identify at least one negative externality from running a donut shop. Explain how these positive and negative externalities could impact the donut shop’s profits. (Hint: think subsidy for positive externality and tax for negative externality.) Draw two graphs that show the price of donuts before and after the positive and negative externality impacted the price of your donuts.

The current market price of bananas is $1 per pound. Use a graph and words to show the effect of a ten cent tax on each pound of bananas. Insert your own numbers into your graph. Be sure to indicate the new price paid by consumers, the new price received by sellers, and the new quantity sold.

Use the figure below to answer the following question. Price A B E LL F S St S K K Quantity D What area represents society's total surplus after the government imposes the excise tax on the market?