Figure: Consumer and Producer SurplusNo TaxWith $1 TaxPriceof apples(per basket)Priceof apples(per basket)Consumersget thisThe governmentgets thisConsumersget thisConsumersurplusConsumerNo one$4.40-gets this(deadweightloss)surplusTax revenue$1$4.00aProducer$900surplus3.40ProducersurplusDProducersget thisProducersget this1,000900 1,000Quantityof apples(baskets)Quantityof apples(baskets)According to the figures, what is the value of the deadweight loss?$100The deadweight loss cannot be calculated.$900$50

Dead Weight Loss is the excess burden or the cost to society that is caused due to inefficiency in…

Figure: Consumer and Producer Surplus No Tax With $1 Tax Price Price of apples (per basket) of apples (per basket) Consumers get this S The government gets this Consumers get this Consumer surplus Consumer No one $4.40 surplus Tax revénue $1 -gets this a (deadweight $4.00 a = $900 Producer surplus loss) 3.40 Producer surplus Producers get this Producers get this Quantity of apples (baskets) 1,000 900 1,000 Quantity of apples (baskets) According to the figures, what is the value of the deadweight loss? O $100 The deadweight loss cannot be calculated. $900 $50

Figure: Consumer and Producer Surplus No Tax With $1 Tax Price Price of apples (per basket) of apples (per basket) Consumers get this S The government gets this Consumers get this Consumer surplus Consumer No one $4.40 surplus Tax revénue $1 -gets this a (deadweight $4.00 a = $900 Producer surplus loss) 3.40 Producer surplus Producers get this Producers get this Quantity of apples (baskets) 1,000 900 1,000 Quantity of apples (baskets) According to the figures, what is the value of the deadweight loss? O $100 The deadweight loss cannot be calculated. $900 $50

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

Section: Chapter Questions

Problem 7PA

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Similar questions

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Suppose that before tax was imposed 400 million gallons of gasoline was supplied at $3.00 per gallon.⦁ What happens when government imposes a tax of 60 cents per gallon on sellers? ⦁ How would such a tax affect the market for gasoline i.e. what is the new equilibrium? ⦁ On whom does the incidence of the tax fall more heavily? ⦁ How much government revenue will be generated by the excise tax? ⦁ What happens when government imposes a tax of 60 cents per gallon on buyers? ⦁ How would such a tax affect the market for gasoline i.e. what is the new equilibrium? PLease answer the parts above:)
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