Consumer surplus , producer surplus , and social surplus.

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Answer 1

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Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 10, Problem 12P

(a)

To determine

Consumer surplus, producer surplus, and social surplus.

(b)

To determine

Price paid after tax.

(c)

To determine

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

(d)

To determine

The argument in support of tax.

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Draw a supply and demand graph for cookies, showing the equilibrium price and quantity. On the same graph, assume that the government imposes a $5 tax on cookies. Show on the graph the following:  what happens to the price paid by the buyers,  what happens to the price received by the sellers,  the size of the tax,  what happens to the quantity sold,  what the consumer surplus is after the tax,  what the producer surplus is after the tax,  what the government tax revenue is after the tax, and  what the deadweight loss is after the tax Use letters to label the different areas on the graph where needed. You don’t need to show any shift of supply or demand 2

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 tax. a. For the market for cigarettes without the tax indicate: i) Price paid by consumers ii) price paid by producers iii) quantity of cigarettes sold iv) buyer’s reservation price v) seller’s reservation price Questions a. What is seller’s reservation price? b. Calculate the consumer surplus before the tax? c. Calculate the producer surplus before tax?

Use the graph to answer the following question: Which of the following statements is most true? A) Producers will pay the entire tax. B) Consumers will pay 1/3 of the tax. C) Producers will pay 1/3 of the tax. D) Consumers will pay the entire tax.

Answer 2

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 10, Problem 12P

(a)

To determine

Consumer surplus, producer surplus, and social surplus.

(b)

To determine

Price paid after tax.

(c)

To determine

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

(d)

To determine

The argument in support of tax.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 10, Problem 12P

(a)

To determine

Consumer surplus, producer surplus, and social surplus.

(b)

To determine

Price paid after tax.

(c)

To determine

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

(d)

To determine

The argument in support of tax.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Consumer surplus is the consumers' gain from trade. The consumer surplus is the area below the demand curve but above the equilibrium price, up to the equilibrium quantity. Producer surplus is the producer's gain from trade. The producer surplus is the area above the supply curve but below the equilibrium price, up to the equilibrium quantity. Consumer surplus is represented by Area A and producer surplus is represented by Area B.

Chapter 10, Problem 12P

(a)

To determine

Consumer surplus, producer surplus, and social surplus.

(b)

To determine

Price paid after tax.

(c)

To determine

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

(d)

To determine

The argument in support of tax.

Expert Solution & Answer

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Answer 5

Chapter 10, Problem 12P

(a)

To determine

Consumer surplus, producer surplus, and social surplus.

(b)

To determine

Price paid after tax.

(c)

To determine

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

(d)

To determine

The argument in support of tax.

Answer 6

Chapter 10, Problem 12P

(a)

To determine

Consumer surplus, producer surplus, and social surplus.

Answer 7

Chapter 10, Problem 12P

(a)

To determine

Consumer surplus, producer surplus, and social surplus.

Answer 8

(b)

To determine

Price paid after tax.

Answer 9

(b)

To determine

Price paid after tax.

Answer 10

(c)

To determine

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

Answer 11

(c)

To determine

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

Answer 12

(d)

To determine

The argument in support of tax.

Answer 13

(d)

To determine

The argument in support of tax.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 10 - Prob. 1Q Ch. 10 - Prob. 2Q Ch. 10 - Prob. 3Q Ch. 10 - Prob. 4Q Ch. 10 - Prob. 5Q Ch. 10 - Prob. 6Q Ch. 10 - Prob. 7Q Ch. 10 - Prob. 8Q Ch. 10 - Prob. 9Q Ch. 10 - Prob. 10Q

Consumer surplus , producer surplus , and social surplus.

Solution Summary: The author explains that the market price is equal to 4, supply curve, and demand curve.

Consumer surplus, producer surplus, and social surplus.

Price paid after tax.

Consumer surplus, producer surplus, government revenue, social surplus, and deadweight loss.

The argument in support of tax.

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Chapter 10 Solutions