This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: dollars per drum of lubricant produced. e. Plot the new equilibrium, showing any changes to the demand or supply curves f. Calculate the new consumer surplus in the market, in dollars. g. Calculate the new producer surplus in the market, in dollars. h. Calculate the revenue generated by the new tax. i. Is there any economic inefficiency at the new market equilibrium? If so, calculate the deadweight loss generated by the new tax. j. What is the incidence of the new tax? Now suppose instead the government introduces a sales tax that is, a tax of 4 dollars per gallon sold (rather than produced). k. Plot the new equilibrium (new starting again from part (d), not part (j)), showing any changes to the demand or supply curves. l. Is the incidence of the tax different to what you found in part (j)? Eco 1 Spring 2007 Problem Set 3 2 ) Textbook question 4.7 (Ch5, p171):...
View Full Document
This homework help was uploaded on 04/09/2008 for the course ECON 001 taught by Professor Caseyquinn during the Spring '08 term at Lehigh University .
- Spring '08