Homework #4 Make sure to show all your work. 1. Below is a graph of the market for cigarettes packs. Assume a tax of $2/pack was just put into effect. 5.65 4.50 P Supply + tax a. 20 30 Who pays the tax initially? (1 pt) b. What is the price at point A? (1 pt) C. What is the price at point B? (1 pt) Supply Demand Q d. How much do consumers pay after the tax? (2 pts) e. How much do producers receive after the tax? (2 pts) f. What is the total tax revenue collected by the government? (1 pt) g. Graphically identify consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax is put into effect. (4 pts) 2. Below is a graph of the market for Dodge Ram Pickups. $85,000 $75,000 $73,000 5000 7000 B Supply Demand Demand + tax Q a. Who pays the tax initially? (1 pt) b. What is the amount of the tax? (2 pts) C. What is the price at point B? (1 pt) d. How much do consumers pay after the tax? (2 pts) e. How much do producers receive after the tax? (2 pts) f. What is the total tax revenue collected by the government? (1 pt) g. Graphically identify consumer surplus, producer surplus, tax revenue, and deadweight loss after the tax is put into effect. (4 pts) 2