Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for gin, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. Graph Input Tool (? 100 Market for Gin 90 Supply Quantity 80 (Bottles) Demand Price 60.00 Supply Price 40.00 (Dollars per bottle) (Dollars per bottle) Tax 20.00 ( Dollars per bottle) 8 8 : 8 8 8 8 PRICE (Dollars per bottle) Demand 0 20 40 60 80 100 120 140 160 180 200 QUANTITY (Bottles) Suppose the government imposes a $20-per-bottle tax on suppliers. At this tax amount, the equilibrium quantity of gin is bottles, and the government collects $ in tax revenue. Now calculate the government's tax revenue if it sets a tax of $0, $20, $40, $50, $60, $80, or $100 per bottle. (Hint: To find the equilibrium quantity after the tax, adjust the "Quantity" field until the Tax equals the value of the per-unit tax.) Using the data you generate, plot a Laffer curve by usingthe green points (triangle symbol) to plot total tax revenue at each of those tax levels. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. (? 2500 AAA 2250 Laffer Curve 2000 1750 1500 TAX REVENUE (Dollars) 1250 1000 750 500 250 0 10 20 30 40 50 60 70 80 100 TAX (Dollars per bottle) Suppose the government is currently imposing a $60-per-bottle tax on gin. True or False: The government can raise its tax revenue by increasing the per-unit tax on gin. O True O False Consider the deadweight loss generated in each of the following cases: no tax, a tax of $40 per bottle, and a tax of $80 per bottle.Consider the deadweight loss generated in each of the following cases: no tax, a tax of $40 per bottle, and a tax of $80 per bottle. On the following graph, use the black curve (plus symbols) to illustrate the deadweight loss in these cases. (Hint: Remember that the arez of a triangle is equal to % x Base x Height. In the case of a deadweight loss triangle found on the graph input tool, the base is the amount of the tax and the height is the reduction in quantity caused by the tax.) @ 4000 T 3600 1 37 Deadweight Loss 3200 2800 1 2400 7 2000 7 1800 1 1200 1 DEADWEIGHT LOSS (Dollars) 200 400 o 10 20 20 40 50 80 70 20 o0 100 TAX (Dollars per bottle) As the tax per bottle increases, deadweight loss increases and then decreases v