understanding the implications of taxes on welfare

1. Understanding the implications of taxes on welfare The following graph represents the demand and supply for pinckneys (an imaginary product). The black point (plus symbol) indicates the pre-tax equilibrium. Suppose the government has just decided to impose a tax on this market; the grey points (star symbol) indicate the alter-tax scenario. + PRICE (Dollars per pinckney) 10 20 QUANTITY (Pinckneys) Complete the following table, given the information presented on the graph. Result Value Equilibrium quantity after tax Price consumers pay after tax $ Per-unit tax $ In the following table, indicate which areas on the previous graph correspond to each concept. Check all that apply. Concept A B C D E F Producer surplus after the tax is imposed i i i i i i i i i J i i Consumersurplus before the tax is imposed i i i i H i i ii i i Tax revenue after the tax is imposed i i i i H i i ii i i Grade It Now Save & Continue Continue without saving