1. Suppose government imposed a legal tax of $1.5 on producers. Show changes in the above graph. Answer: 2. How much will be the producer surplus and consumer surplus after imposing of $1.5 taxes on the producer. Show in the graphs and show all calculations. Answer: 3. How much consumer and producer will pay after imposing of $1.5 taxes on producer. Show in the graphs too. Answer: 4. Calculate DWL and show in the graph. Answer: 5. Calculate the government revenue and show in the graph. Answer:

Oil Market with Tax 6.00 Supply w Tax 5.50 5.00 Supply 4.50 4.00 3.50 Price ($ per gallon) 3.00 2.50 2.00 1.50 1.00 0.50 0.00 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 Quantity (Gallons of oil, millions)