. Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer purchased. a. 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. b. What is the difference between the price paid by consumers and the price received by producers? c. Has the quantity of beer sold increased or decreased? Can you identify any government revenues?

Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
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1. Suppose the federal government requires beer drinkers to pay a $2 tax on each case of beer purchased.

a. 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.

b. What is the difference between the price paid by consumers and the price received by producers?

c. Has the quantity of beer sold increased or decreased? Can you identify any government revenues?

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