Use the following to answer questions:
Figure: Imposition of a Tax
-(Figure: Imposition of a Tax) Refer to the figure. Consumer surplus before the $4 tax is ________, and consumer surplus after the $4 tax is ________.
A) abc; a
B) a; c
C) ab; c
D) f; bd

Question

Use the following to answer questions:
Figure: Imposition of a Tax 
-(Figure: Imposition of a Tax) Refer to the figure. Consumer surplus before the $4 tax is ________, and consumer surplus after the $4 tax is ________.
A) abc; a 
B) a; c 
C) ab; c 
D) f; bd

Quizplus · Accepted Answer

Before the tax, consumer surplus is the area above the price and below the demand curve, which is area abc. After the tax, the consumer surplus is reduced to area a.

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