Assume the supply curve for diapers is a typical, upward-sloping straight line, and the demand curve for diapers is a typical, downward-sloping straight line. suppose the equilibrium quantity in the market for diapers is 1,000 per month when there is no tax. then a tax of $0.50 per diaper is imposed. the effective price paid by buyers increases from $1.50 to $1.90 and the effective price received by sellers falls from $1.50 to $1.40. the government’s tax revenue amounts to $475 per month. which of the following statements is correct? a) after the tax is imposed, the equilibrium quantity of diapers is 900 per month. b) the tax causes a decrease in consumer surplus of $380.c) the demand for diapers is more elastic than the supply of diapers. d) the deadweight loss of the tax is $12.50.

Ultravision inc. anticipates sales of $280,000 from january through april. materials will represent 50 percent of sales, and because of level production, material purchases will be equal for each month during the four months of january, february, march, and april. materials are paid for one month after the month purchased. materials purchased in december of last year were $24,000 (half of $48,000 in sales). labor costs for each of the four months are slightly different due to a provision in the labor contract in which bonuses are paid in february and april. the labor figures are: january $14,000 february 17,000 march 14,000 april 19,000 fixed overhead is $10,000 per month. prepare a schedule of cash payments for january through april. (assume the $280,000 of sales occur equally over the four months of january through april, i.e. monthly sales = $280,000 / 4.)