Question - A tax on yachts would normally be considered a tax on wealthy consumers. Consider a $60,000 excise tax on producers for each yacht sold. The graph illustrates the demand and supply curves for yachts both before and after the tax is imposed.
a. Total economic surplus before the tax is $24 million. Show this area on the graph.
Instructions: Use the tool provided 'Economic Surplus' to illustrate this area on the graph.
b. What is the consumer surplus after the imposition of the tax?
Instructions: Use the tool provided 'CStax' to illustrate this area on the graph.
Consumer surplus after the imposition of the tax is $ million.
c. What is the producer surplus after the imposition of the tax?
Instructions: Use the tool provided 'PStax' to illustrate this area on the graph.
Producer surplus after the imposition of the tax is $million.
d. What is the total revenue generated from the tax?
Instructions: Use the tool provided 'Tax Revenue' to illustrate this area on the graph.
Tax revenue from the tax after the imposition of the tax is $ million.
e. What is the total economic surplus after the imposition of the tax?
Total economic surplus after the imposition of the tax is $ million.
f. What is the deadweight loss after the imposition of the tax?
The deadweight loss after the imposition of the tax is $ million.