a) Who gets the revenue in the case of a tax? (Click to select)SupplierConsumerG

Question

a) Who gets the revenue in the case of a tax?

(Click to select)SupplierConsumerGovernment

Label the area that illustrates the tax.

Instructions: On the graph above, click and drag the appropriate curve to a new position. When you release your mouse button the curve should snap to a new position. If the curve returns to its original position try clicking and dragging the curve further in the desired direction before releasing the mouse button. Then click and drag the Plotter tool to shade the desired area onto the grid and release your mouse button. Continue clicking and dragging the end points of the shaded area until you get the desired region.

b) Who gets the revenue in the case of a price floor?

(Click to select)GovernmentSupplierConsumer

Label the transfer of surplus from consumers to suppliers.

Instructions: On the graph above, click and drag the equilibrium point P1Q1 from the tools to show a new equilibrium that illustrates a price floor. Then click and drag the plotter tool labeled surplus to shade the desired area onto the grid and release your mouse button. Continue clicking and dragging the end points of the shaded area until you get the desired region. To remove a point from the graph, drag the point off an edge of the graph.


c) Label welfare loss of the tax and the price floor.

Instructions: On the graph above, click and drag the appropriate curve to a new position. When you release your mouse button the curve should snap to a new position. If the curve returns to its original position try clicking and dragging the curve further in the desired direction before releasing the mouse button. Then click and drag the Plotter tool to shade the desired area onto the grid and release your mouse button. Continue clicking and dragging the end points of the shaded area until you get the desired region.

Explanation / Answer

a) revenue goes to government in case of tax

b)suppliers gets revenue as producers surplus increase

c)welfare loss of tax is triangle formed between two supply curves.price floor will be below Ps

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