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Unformatted text preview: 1 195.603 Applied Microeconomics Professor: Carey Borkoski, Ph.D. Homework #6 Due October 17 th Answer the following questions on your own paper. First provide the intuition or conceptual answer. If applicable, illustrate with a graph or calculations. (30 points) 1. Suppose the government levies a tax of the vertical distance from point A to point B. Using the graph shown, determine the value of each of the following: (10 points) a. Equilibrium price before the tax b. Consumer Surplus before the tax c. Producer Surplus before the tax d. Total Surplus before the tax e. Consumer Surplus after the tax f. Producer Surplus after the tax g. Total tax revenue to the government h. Total Surplus i. Deadweight Loss A B Demand Supply 100 200 300 400 500 600 700 800 900 1000 Quantity 2 4 6 8 10 12 14 16 18 20 22 Price 2. Analyze the market for tobacco and assume that this industry creates a negative externality....
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This note was uploaded on 01/25/2012 for the course AS 195.603 taught by Professor C.b. during the Fall '11 term at Johns Hopkins.
- Fall '11