Question - Government officials in Kansas impose an excise tax of $0.30 per gallon of gasoline sold in the state. The tax is paid by suppliers. The table shows demand and supply schedules both with and without the excise tax.
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Market for Gasoline
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Price (dollars per gallon)
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Quantity Demanded (billions of gallons)
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Quantity Supplied (billions of gallons)
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Quantity Supplied with Tax (billions of gallons)
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$3.10
|
1.16
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1.34
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1.28
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|
3.00
|
1.17
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1.32
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1.26
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2.90
|
1.18
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1.30
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1.24
|
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2.80
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1.19
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1.28
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1.22
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2.70
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1.20
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1.26
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1.20
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2.60
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1.21
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1.24
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1.18
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2.50
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1.22
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1.22
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1.16
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2.40
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1.23
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1.20
|
1.14
|
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2.30
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1.24
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1.18
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1.12
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a. What is the tax revenue generated by the excise tax on gasoline?
b. Indicate on the graph the deadweight loss generated by the excise tax on gasoline.
Instructions: Use the tool provided 'DWL' to illustrate this area on the graph. Round your answer below to 3 decimal places.