MC Qu. 80 Use the figure below to answer...

Use the figure below to answer the following question.

The horizontal axis is labeled quantity and the vertical axis is labeled price. The two supply curves, S sub t and S starts from different points on the vertical axis and rises parallel to each other. Curve S starts from point F on the lower section of the vertical axis. It then rises through point H (J, E). Curve S sub t starts from point C on the middle section of the vertical axis. It then rises through point G (J, B). The demand curve D falls from point A on the top section of the vertical axis. It intersects s sub t at point G (J, B) and S at point I (K, C).

What area represents society's total surplus after the government imposes the excise tax on the market?

Question

MC Qu. 80 Use the figure below to answer...

Use the figure below to answer the following question.

The horizontal axis is labeled quantity and the vertical axis is labeled price. The two supply curves, S sub t and S starts from different points on the vertical axis and rises parallel to each other. Curve S starts from point F on the lower section of the vertical axis. It then rises through point H (J, E). Curve S sub t starts from point C on the middle section of the vertical axis. It then rises through point G (J, B). The demand curve D falls from point A on the top section of the vertical axis. It intersects s sub t at point G (J, B) and S at point I (K, C).

What area represents society's total surplus after the government imposes the excise tax on the market?

BlackTom AI · Accepted Answer

To analyze the total surplus after the excise tax, we must identify which geometric areas on the labeled supply and demand diagram represent the sum of consumer and producer surplus that remains for society.
Option 1: triangle FHE plus triangle BGA. This pairing corresponds to the portions of the welfare diagram that remain as the post-tax equilibrium areas for consumer and producer surplus, capturing the retained gains from trade after the tax wedges are introduced. The triangle FHE lies under the price intercept and above the post-tax supply intersection, while triangle BGA lies above the post-tax quantity and under the demand curve around the new intersection; together they characterize the surviving surplus.
Option 2: triangle GHI. This triangle is located around the intersection points where the tax alters the equilibrium, but GHI typically does not map to the total remaining surplus after tax because it omits other surplus portions captured by FHE and BGA and may include areas that have become transfers to tax revenue or are otherwise not part of societal surplus.
Option 3: rectangle EHBG plus triangle BGA. The rectangle EHBG would imply a rectangular area spanning between two price levels and two quantities, which does not align with how consumer and producer surplus are partitioned in standard excise-tax diagrams with linear supply and demand curves. The surplus after tax is not a single rectangle plus triangle configuration in this diagram.
Option 4: triangle FHE plus triangle BGA plus rectangle EHGB. Including rectangle EHGB would double-count or incorporate an area that does not belong to the net social surplus after tax because the rectangle across EHGB spans regions that are not part of the retained welfare under the post-tax allocations. The correct decomposition typically involves the two triangles FHE and BGA alone as the non-transfer surplus left for society.
In summary, the combination of geometric areas that represents the remaining social surplus after the tax is best described by the two specific triangles in Option 1, while the other options introduce regions that either misallocate surplus or mix in areas that do not correspond to welfare kept by society after the tax shifts the equilibrium.

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Question at position 6 What are the values of total surplus before and after tax imposition?(TS0=10.5,TS1=6)\left(TS^0=10.5,TS^1=6\right)(TS0=12.5,TS1=10)\left(TS^0=12.5,TS^1=10\right)(TS0=13.5,TS1=12)\left(TS^0=13.5,TS^1=12\right)(TS0=15,TS1=10.5)\left(TS^0=15,TS^1=10.5\right)

Table 7-11[table] Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0 [/table]Refer to Table 7-11. At a price of $2.00, total surplus is

Moving production from a high-cost producer to a low-cost producer will

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

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Question at position 6 What are the values of total surplus before and after tax imposition?(TS0=10.5,TS1=6)\left(TS^0=10.5,TS^1=6\right)(TS0=12.5,TS1=10)\left(TS^0=12.5,TS^1=10\right)(TS0=13.5,TS1=12)\left(TS^0=13.5,TS^1=12\right)(TS0=15,TS1=10.5)\left(TS^0=15,TS^1=10.5\right)

Table 7-11​[table] Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0 [/table]​​​Refer to Table 7-11. At a price of $2.00, total surplus is

Moving production from a high-cost producer to a low-cost producer will

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

Figure 8-1Refer to Figure 8-1.Suppose the government imposes a tax of P'–P'''. Total surplus before the tax is measured by the area

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Table 7-11[table] Price(Dollars per unit) | Quantity Demanded(Units) | Quantity Supplied(Units) 12.00 | 0 | 36 10.00 | 3 | 30 8.00 | 6 | 24 6.00 | 9 | 18 4.00 | 12 | 12 2.00 | 15 | 6 0.00 | 18 | 0 [/table]Refer to Table 7-11. At a price of $2.00, total surplus is