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4 6 30 points consider a consumer who purchases

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Unformatted text preview: to reduce consumption by 5 units? Show the effect of the tax on quantity and price (both the price paid by the consumer and the price received by the producer) in the diagram above. c. How did consumer and producer surplus change with the tax? Show using the graph above and a table. Make sure to highlight the deadweight loss. d. Show the area representing tax revenue in the diagram above. 3 5. (20 points) A person who buys a life insurance policy pays a certain amount per year and receives for his family a much larger payment in the event of his death. Explain why an economist would expect buyers of life insurance to have higher death rates than the average person using the ideas of moral hazard and adverse selection. 4...
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