Question

please answer the following questions

)Refer to the following supply an X C The "budget Line" Shows: Questi x + /attempt/quiz start frame auto.d2?ou-1159518Bisprv-8idrc-08qi-5916298cfal-08dnb-0 00:00 Time Left:1:25:02 Tasnim Mayasir-Orwig: Attempt 1 Refer to the following statement and graph of the market for wheat. "The government adopts a price support program for wheat, and supports the price of P2." Pi D P: Pa As a result of this price support program: a) there will be shortage of wheat in the amount of AB b) there will be a surplus of wheat in the amount of Q1Q2. c) there will be surplus of wheat in the amount of Q0Q1. di wheat farmers will receive less total income than if there were no price support 12 13 e 15 16 program. Question 22 (3 points) Saved 18 19 Refer to the following supply and demand graph for a product on which the government imposes an excise tax. P D

Answer 1

21. The government adopts a price support program for wheat , supports the price of P2.

Then ,there will be a surplus of wheat in the amount of Q1Q2. Hence,option(B) is correct.

22. The government imposes an excise tax , as a result supply curve shifts leftward.

Before tax : Consumers paid = $8

After tax : Consumers paid = $11 .

After tax : equilibrium quantity = 7 units

So, Total amount of excise tax paid by consumers = (11-8)(7)= $21.

Hence,option(C) is correct.

23. Before tax : Sellers receive = $8

After tax : Sellers receive = $5

So, the burden of the tax on sellers in terms of the price per unit sold = $(8-5)= $3 .

Hence,option(C) is correct.

24. The total burden to the society = Tax revenue = $(11-5)(7)= $42. Hence,option(A) is correct.

19. The area of Q1ABQ2 measures the amount government will pay to wheat farmers. Hence,option(C) is correct.

20. The area OP2AQ1 measures the amount private buyers will pay to wheat farmers. Hence,option(D) is correct.