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Sofia pays Sam $50 to mow her lawn every week. When the government levies a mowing tax of $10 on Sam, he raises his price to $60. Sofia continues to hire him at the higher price. What is the change in producer sur- plus, change in consumer surplus, and deadweight loss? a. $0, $0, $10 h b. $0, -$10, $0 c. +$10, -$10, $10 d. +$10,-$10, $0

Respuesta :

Answer:

b. $0, -$10, $0

Explanation:

Sam is the producer, and he was getting $50 for moving Sofia's lawn. When the government imposes a tax of $10 on his activity, he now receives $60, but because $10 of those $60 is paid in taxes, his surplus remains the same: $50, so the change in the producer's surplus is $0.

Sofia is the consumer, and she was paying $50, but now she pays $60, thus, her consumer surplus has changed by -$10.

The sum of the change in consumer and producer surplus is $10 ($0 + $10), which is the same as the growth of government revenue from the taxes imposed: $10, therefore, the deadweight loss is $0.

The change in producer surplus is $0, consumer surplus is -$10, and the deadweight has been $0, option B is correct.

Producer surplus has been the amount received by the person after the completion of all expenses. Thus, the profit of the producer has been the producer's surplus.

Sam has been the producer. With the increase in tax, there has been an increase in the amount paid to Sam. Although the increased surplus has been spent as tax.

Thus, the producer surplus has been $0.

The consumer surplus has been the profit made by the consumer. Sofia has been the consumer. With the increase in the government's tax revenue, Sofia has to pay $10 extra.

Thus, the consumer surplus has been -$10.

The deadweight loss has been the cost prepared or hold by society. There has been a consumer loss of $10, with a producer surplus of $10.

Thus, the deadweight cost has been $0.

Since the producer surplus is $0, consumer surplus is -$10, and the deadweight has been $0, option B is correct.

For more information about the consumer surplus, refer to the link:

https://brainly.com/question/18439680