Please help only Q4 (i) and (ii). Reference Q1-3 are below.

Q4: The equivalency between taxing consumers and taxing producers Let's summarize what we learn in Q1, 02 and 03. {ii {iii In Q2 where the tax is imposed on consumers, we learn that: The consumer tax has the effect of shifting the demand curve (up I down} by the amount of the tax. Answer: The new 5&D intersection point gives us the market price that consumers pay producers. Consumers still need to pay the tax, effectively (increasing I reducing) their total price paid by that amount. Answer: From Q2, what is the expression for the consumers' tax burden {per unit]? Answer: - From Q2, what is the expression for the producers' tax burden (per unit)? Answer: - In [13 where the tax is imposed on producers, we learn that: The producer tax has the effect of shifting the simply curve [up I down) by the amount of the tax. Answer: The new 5&0 intersection point gives us the maket price that consumers pay producers. Producers still need to pay the tax, effectiver [increasing I reducing) their net price received by that amount Answer: From [13, what is the expression for the consumers' tax burden [per unit]? Answer: - From [13, what is the expression for producers' tax burden {per unit}? Answer: - Thus, as far as the effect on consumer and producer prices are concerned, there is an equivalency between taxing the consumers and taxing the producers. Further, from the much simpler analysis in C11, we see clearly that the tax has the effect of creating a P W between the net price consumers pay and the net price producers receive, with the difference being the amount of the Answer1:P w Answer2:T Q1: Suppose the government is to impose a tax of $1 per unit on the transaction of the good. We don't know yet whom the government will impose the tax on. We do know that the tax will generate a $1 wedge between the net price consumers pay and the net price producers receive. Price Supply = MC The $1 tax is shown here as the red line. To allow for the $1 wedge between consumer and producer prices, one tucks the red line between the demand and supply curves. There are two places in the diagram that the red line $1 will fit: one is to the left of the current equilibrium $5 point (+), and the other is to the right. The choice should be such that the net price consumer pay is greater than the net price producers receive by exactly $1. There has to be $1 left over for the government to collect as tax. Demand = MB Quantity (ii) From there, identify on the diagram the net price consumers pay and the net price producers receive. Denote the two prices by Pc and Pp, respectively. (ii) Given (ii), who bear the tax burden? Consumers? Producers? Both? Answer: (iv) Who bears more of the tax burden? Consumers? Producers? Equally? Answer: (v) In the next chapter, you will learn that the way the tax burden is shared (in a competitive market) is determined by the "steepness" of the supply and demand curves. (vi) On the diagram, identify the equilibrium quantity under the tax regime. Denote it by Qtax.Q2: Taxing the Consumers: As in 0,3, the government is to impose a tax of $1 per unit on the transaction of the good. But now we know that the tax is to be imposed on consumers. Poe Withaoonsumertaxof$1 permit, the MB mm" shift downbySl. This is because the benet from consumption is reduced by 51 due to the consumption tax. {ii} Identify the new equilibrium point and denote it as n on the diagram. {iii} From I), identify the new equilibrium price and denote it as P" on the price axis. This is the price that consume rs pay producers under this tax regime. Next, consumers will pay taxes! {iv} Starting at Point I], draw a vertical dash line upwardly until it hits the original demand curve [i.e., the demand curve without tax]. Denote that point as I. {v} Starting at Point 2, draw a horizontal dash line toward the price axis and denote the associated price as P'. This is the total price that consumers pay, which is the sum of the price consumers pay producers {PP} and the tax consumers pay Uncle Sam [51]. {vi} P'-P"=? (A) A random number (B) The tax amount (Cl 51 [D] Both B and C are correct. Answer: Q3: Taxing the Producers: Similar to Q4, the government is to impose a tax of$1 per unit on the transaction of the good. But, this time the taxis to be imposed on producers. Price Withaproducertaxcfperunmthehc curve will shift upby$1. '5 Thisisbeoeuseieccstafproductionis increased by $1 due to the production tax. o-gmareoagmaraoyomoraeuo {ii} Identify the new equilibrium point and denote it as n on the diagram. {iii} From 0, identifythe new equilibrium price and denote it as PC on the price axis. This is the price that consumers pay producers under this tax regime. Next, producers will pay taxes. {iv} Starting at Point I], draw a vertical dash line downwardly until it hits the original supply curve (i.e., the supply curve without tax). Denote that point as E. {v} Starting at Point Z, draw a horizontal dash line toward the price axis and denote the associated price as P". This is the net price that producers receive, which is the difference between the price received from consume rs [P'] and the tax producers pay Uncle Sam {$1}. {vi} P'-P"=? (A) A random number (B) The tax amount (Cl 51 {D} Both B and C are correct