When a tax is levied on a good, a. government revenues exceed the loss in total welfare. b. there is a decrease in the quantity of the good bought and sold in the market. c. the price that sellers receive exceeds the price that buyers pay. d. All of the above are correct.

Suppose the daily demand curve for gasoline is as provided in the accompanying graph. a. Calculate the consumer surplus in the market for gasoline if the market price is $3.50. Consumer surplus = $   ___________ million   Now suppose the price decreases to $2.50 per gallon. Move the price line on the graph to reflect this change, then calculate the new consumer surplus. New consumer surplus = $________million

Answer to image?

Question 4