Y5

Test 5QUESTION 1Use the supply and demand curves below to answer the following questions.Demand: Price=100-2Q+ISupply: Price=15+3QI stands for consumers' incomeSuppose that the government imposes a tax of T on the consumer. In the space below write out the new demand curve. HINT: remember how changes in taxes shift the demand curve.QUESTION 2Using the supply curve and your demand curve given above find the new equilibrium quantity as a function of T and I.QUESTION 3How does the tax revenue change as consumer income changes? Hint: Recall that the revenue generated by a tax is the amount of the tax multiplied by the number of goods bought/sold.- Increase- Decrease- Stay the same- Not enough information given.QUESTION 4Using excel and your equation from 4, plot how the tax revenue changes as T increases. Assume income is 15. HINT: Revenue will be on your y-axis and the tax (0,1,2,3,...) will be on your x-axis. Paste your plot in the space below.QUESTION 5Assume income is 15. Given this information, find the revenue-maximizing tax.QUESTION 6Assume income is 15. Given this information, find the tax revenue that would be generated at the tax revenue-maximizing tax.