HW chap 6-1


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Unformatted text preview: nd" to plot Beatriz's demand curve. The x­axis represents S, and the y­axis represents PS. Co n su mp tio n o f Pap er Price 12 11 10 9 8 7 6 5 4 3 2 1 D 0 0 100 200 300 400 500 600 Quantity a. Compute the change in her consumer surplus for the proposed tax increase. Instructions: Round your answer to 2 decimal places. Include a negative sign if necessary. $ ­581.25 b. How much revenue will the government raise by taxing Beatriz? http://e z to.mhe c loud.mc gr a w- hill.c om/hm.tpx? todo= pr intvie wSingle 3/5 1/21/2014 Assignme nt Pr int Vie w Instructions: Enter your answer as a whole number. $ 525.00 What is the combined change in government revenue and consumer surplus? Instructions: Enter your answer as a whole number. Include a negative sign if necessary. $ ­56.25 Does the new tax raise enough revenue for the government to compensate Beatriz for her loss? No rev is ed jrl 08­08­2011 Explanation: The demand curve is linear. When PS equals zero, S equals 525. This is where the demand curve intersects the horizontal axis. When S equals zero, PS equals 525/50 = 1...
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