Consider the market for antique cars. The market price of each antique car is $140,000, and each buyer demands no more than one antique car. Suppose that Tim is the only consumer in the antique car market. His willingness to pay for an antique car is $245,000. Based on Tim's willingness to pay, the following graph shows his demand curve for antique cars. Shade the area representing Tim's consumer surplus using the green rectangle (triangle symbols). Tim's Demand Tim's Consumer Surplus 210 175 Market Price PRICE (Thousands of colors) 140 100 70 16 QUANTITY (A cars Now, suppose another buyer, Alyssa, enters the market for antique cars, and her willingness to pay is $175,000. Based on Alyssa's and Tim's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol). Next, shade Tim's consumer surplus using the green rectangle (triangle symbols), and shade Alyssa's consumer surplus using the purple rectangle (diamond symbols) Note: Plot your points as a step function in the order in which you would like them connected, Line segments will connect the points automatically 200 245 Demand Curve 175 Tim's Consumer Surplus Market Price PRICE (Thousands of dolar) Ayaw's Consumer Surplus 155 36 QUANTITY (Antiquar) Suppose Brian is willing to pay a total of $105,000 for an antique car. True or False: Keeping his maximum willingness to pay for an antique car in mind, Brian will buy the antique car because it would be worth more to him than its market price of $140,000 o True False 2. Taxes and welfare Consider the market for commercial fans. The following graph shows the demand and supply for commercial fand before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fons in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before Tax 200 + 100 Equilibrium 100 Demand 100 Consumer Surplus PRICE (Dollars perfan) 100 Producer Surplus Supply 0 20 100 150 200 250 300 360 400 45000 QUANTITY (Fans) Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of $40 per fan. First, use the tanquadrilateral (clash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. After Tax 200 100 Tax Revenge 100 Demand Demand 160 Consumer Surplus 130 100 PRICE (Dollars per fan) Tax Wedge Producer Surplus Supply Deadweight Los 20 0 0 GO 100 1150 00 450 500 200 o 300 QUANTITY Fans) Consumer Surplus 120 100 Tax Wedge PRICE (Dollars per a 10 Producer Surplus Supply 40 Deadweight Loss O SO 100 10 400 500 200 2500350 QUANTITY (Fans) Complete the following table by using the previous graphs to determine the values of consumer and producar surplus before the tax, and consumer surplus, producer surplus, tax revenue and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area, Before Tax After Tax (Dollars) (Dollars) Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss 0 Consider the market for antique cars. The market price of each antique car is $140,000, and each buyer demands no more than one antique car. Suppose that Tim is the only consumer in the antique car market. His willingness to pay for an antique car is $245,000. Based on Tim's willingness to pay, the following graph shows his demand curve for antique cars. Shade the area representing Tim's consumer surplus using the green rectangle (triangle symbols). Tim's Demand Tim's Consumer Surplus 210 175 Market Price PRICE (Thousands of colors) 140 100 70 16 QUANTITY (A cars Now, suppose another buyer, Alyssa, enters the market for antique cars, and her willingness to pay is $175,000. Based on Alyssa's and Tim's respective willingness to pay, plot the market demand curve on the following graph using the blue points (circle symbol). Next, shade Tim's consumer surplus using the green rectangle (triangle symbols), and shade Alyssa's consumer surplus using the purple rectangle (diamond symbols) Note: Plot your points as a step function in the order in which you would like them connected, Line segments will connect the points automatically 200 245 Demand Curve 175 Tim's Consumer Surplus Market Price PRICE (Thousands of dolar) Ayaw's Consumer Surplus 155 36 QUANTITY (Antiquar) Suppose Brian is willing to pay a total of $105,000 for an antique car. True or False: Keeping his maximum willingness to pay for an antique car in mind, Brian will buy the antique car because it would be worth more to him than its market price of $140,000 o True False 2. Taxes and welfare Consider the market for commercial fans. The following graph shows the demand and supply for commercial fand before the government imposes any taxes. First, use the black point (plus symbol) to indicate the equilibrium price and quantity of commercial fons in the absence of a tax. Then use the green point (triangle symbol) to shade the area representing total consumer surplus (CS) at the equilibrium price. Next, use the purple point (diamond symbol) to shade the area representing total producer surplus (PS) at the equilibrium price. Before Tax 200 + 100 Equilibrium 100 Demand 100 Consumer Surplus PRICE (Dollars perfan) 100 Producer Surplus Supply 0 20 100 150 200 250 300 360 400 45000 QUANTITY (Fans) Suppose the government imposes an excise tax on commercial fans. The black line on the following graph shows the tax wedge created by a tax of $40 per fan. First, use the tanquadrilateral (clash symbols) to shade the area representing tax revenue. Next, use the green point (triangle symbol) to shade the area representing total consumer surplus after the tax. Then, use the purple point (diamond symbol) to shade the area representing total producer surplus after the tax. Finally, use the black point (plus symbol) to shade the area representing deadweight loss. After Tax 200 100 Tax Revenge 100 Demand Demand 160 Consumer Surplus 130 100 PRICE (Dollars per fan) Tax Wedge Producer Surplus Supply Deadweight Los 20 0 0 GO 100 1150 00 450 500 200 o 300 QUANTITY Fans) Consumer Surplus 120 100 Tax Wedge PRICE (Dollars per a 10 Producer Surplus Supply 40 Deadweight Loss O SO 100 10 400 500 200 2500350 QUANTITY (Fans) Complete the following table by using the previous graphs to determine the values of consumer and producar surplus before the tax, and consumer surplus, producer surplus, tax revenue and deadweight loss after the tax. Note: You can determine the areas of different portions of the graph by selecting the relevant area, Before Tax After Tax (Dollars) (Dollars) Consumer Surplus Producer Surplus Tax Revenue Deadweight Loss 0