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Remember that a correctly labeled graph requires that you label all axes, curves, and equilibrium point values. The word "calculate" means you must show your work.

Assume the market for Good Z is in equilibrium. The demand for Good Z is unit elastic, and the supply is relatively elastic.

(a) Draw a correctly labeled demand and supply graph for Good Z. Label the equilibrium price Pe and the equilibrium quantity Qe.

(b) Assume the government imposes a per-unit tax on Good Z. On your graph from part (a), show each of the following after the tax has been implemented.

(i) The equilibrium buyer's price labeled Pt

(ii) The equilibrium quantity labeled Qt

(iii) The area representing the new producer surplus, shaded completely

(iv) The area representing deadweight loss, labeled DWL

(c) Assume that the seller's price after the tax is 2000 dollars, that the quantity supplied at this price is 50 units of Good Z, and that the minimum price on the supply curve (where it meets the y-axis) is 1000 dollars. Calculate the area of producer surplus.

(d) Will the price paid by consumers increase by the same amount as the tax? Explain.

(e) Will the loss in consumer and producer surplus be greater than, less than, or equal to the tax revenue collected by the government? Explain.

Answer:

I can guide you through the process of solving the questions.

(a) To draw the demand and supply graph for Good Z, you would need to plot the demand curve and the supply curve on a coordinate graph with price on the y-axis and quantity on the x-axis. The demand curve would typically slope downward, representing the inverse relationship between price and quantity demanded. The supply curve would typically slope upward, representing the positive relationship between price and quantity supplied. The intersection of the demand and supply curves represents the market equilibrium, where the quantity demanded is equal to the quantity supplied. Label this point Pe for price and Qe for quantity.

(b) If the government imposes a per-unit tax, the supply curve will shift upwards by the amount of the tax, and the new equilibrium will be at a higher price and a lower quantity than before the tax was imposed. On your graph, label the new equilibrium buyer's price as Pt and the new equilibrium quantity as Qt. The shaded area representing the new producer surplus will be the difference between the new supply curve and the old supply curve above the new equilibrium quantity. The area representing deadweight loss (DWL) is the triangular area that represents the reduction in total surplus (consumer plus producer surplus) due to the tax.

(c) To calculate the area of producer surplus, you need to determine the difference between the price received by the producer (2000 dollars) and the minimum price on the supply curve (1000 dollars). The area of the producer surplus would then be a rectangle with a height of 1000 dollars and a width of 50 units of Good Z.

(d) The price paid by consumers will not increase by the same amount as the tax because the demand for Good Z is unit elastic, meaning that the quantity demanded will change by the same proportion as the price. As a result, the increase in the price of Good Z due to the tax will be partially absorbed by the consumers in the form of a reduced quantity demanded, and the increase in the price paid by consumers will be less than the tax.

(e) The loss in consumer and producer surplus will be equal to the tax revenue collected by the government. The tax revenue is equal to the amount of the tax times the quantity sold, which is equal to the reduction in consumer surplus plus the reduction in producer surplus. The reduction in consumer surplus is equal to the difference between the consumer's willingness to pay for the good and the price paid, and the reduction in producer surplus is equal to the difference between the price received and the cost of production.

To draw the demand and supply graph for Good Z, you would need to plot the demand curve and the supply curve on a coordinate graph with price on the y-axis and quantity on the x-axis.

The demand curve would typically slope downward, representing the inverse relationship between price and quantity demanded. The supply curve would typically slope upward, representing the positive relationship between price and quantity supplied.

The intersection of the demand and supply curves represents the market equilibrium, where the quantity demanded is equal to the quantity supplied.

If the government imposes a per-unit tax, the supply curve will shift upwards by the amount of the tax, and the new equilibrium will be at a higher price and a lower quantity than before the tax was imposed.

Therefore, you would need to plot the demand curve and the supply curve on a coordinate graph with price on the y-axis and quantity on the x-axis.

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Help me please, I would appreciate it!

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PLEASE HELP FAST IT IS URGENT!! I WILL ALSO NEED AN EXPLANATION!!
5. In the third paragraph (lines 11–14), the authors’ shift in tone primarily serves to contrast
A. their frustration with current US eating habits with their hope for healthy changes
B. their outraged incredulity at US food choices with their insistence on needed change