the questions are better seen by opening up the individual photos. Thanks!
The market for pizza is characterized by the following demand and supply curves. #4 Use the grey point (star symbol) to indicate the competitive market equilibrium. Then use the green point (triangle symbol) to shade the area that represents consumer surplus in this market. Next use the purple point (diamond symbol) to shade the area that represents producer surplus. Finally, use the black point (plus symbol) to indicate the deadweight loss in this market. (Hint: If the value for any of these graphical objects is zero, leave that element on the palette.) Supply 4.5 Demand 4.0 Equilibrium 3.5 Price of Pizza (Dollars) 3.0 Consumer Surplus Producer Surplus Deadweight Loss Quantity of Pizza (Thousands) Suppose that the government imposes a tax on pizzerias of $1 per pizza sold. On the following graph, use the grey segment (star symbols) to show the tax wedge that forms at the new quantity sold because of the tax. Then use the tan polygon (dash symbols) to indicate the tax revenue generated by this tax. Then use the green point (triangle symbol) to shade the area that represents consumer surplus, and the purple point (diamond symbol) to shade the area that represents producer surplus. Finally, use the black point (plus symbol) to indicate the deadweight loss in this market. (Hint: If the value for any of these graphical objects is zero, leave that element on the palette.) ? 5.0 Supply Demand 4.0 Tax Wedge Price of Pizza (Dollars) Tax Revenue A Consumer Surplus Producer Surplus 0.5 Quantity of Pizza ( Thousands ) Deadweight Loss Indicate whether each of the areas listed in the following table increased, decreased, or remained the same as a result of the tax. Increased Decreased Unchanged Consumer Surplus Producer Surplus O O Government Tax Revenue Deadweight Loss If the tax were removed, pizza eaters and sellers would be better off, but the government would lose tax revenue. Suppose that consumers and producers voluntarily transferred some of their gains to the government. True or False: All parties (including the government) could be made better off with this transfer than they were with a tax. True FalseHotel rooms in Smalltown go for $100. and 800 rooms are rented on a typical day. To raise revenue, the mayor decides to charge hotels a tax of $12 per rented room. After the tax is imposed, the going rate for hotel rooms rises to $110, and the number of rooms rented falls to 700. Use the ailowing graph to help you answer the questions that follow. You will not be graded on any changes you make to this graph. \"0 O 120 Snatch Demand 100 D Scratch Supply '1' Su'ald1 Points 40 Price of Hotel Rooms 8 u an: no sun we won mm mm Quanlily of Holel Rooms This tax raises $14,400 in government revenue and causes a deadweight loss of $600 in this market. The mayor now doubles the tax to $24. The price rises to $120, and the number of rooms rented falls to 600. This higher tax raises $14,400 in government revenue and causes a deadweight loss of $2,400 in this market. when the tax is doubled, the tax revenue rises by less than V double, and the deadweight loss rises by more than ' double. #5 2. Tax Revenue and 1. Equilibrium Effect Deadweight Loss STEP: 1 of2 Suppose that a market is described by the following supply and demand equations: (25 = 2P QD = 300 P The equilibrium price in this market is $ , and the equilibrium quantity is units. Suppose that a tax of T is placed on buyers, so the new demand equation is as follows: QD = 3UD(P+T) The new equilibrium price is V , and the new equilibrium quantity is V Increases.r Increases! Increases.l The price received by sellers Decreases V , the price paid by buyers Decreases V , and the quantity sold Decreases V
