Beatriz enjoys writing and uses a large amount of paper. Currently, paper costs 2 cents per sheet. The formula for her demand curve is S = 52500 – 5000PS, where PS is the price of and S is the number of sheets purchased. The governor of her state proposed taxing paper at the rate of $0.50 for each 100 sheets. Assume that this policy would increase the price of paper to 2.5 cents per sheet (including tax) a. Draw Beatriz demand curve. Using the method described in Section 6.2, compute the change in her consumer surplus for the proposed tax increase.
b. How much revenue will the government raise by taxing Beatriz? How does that revenue compare to her economic losses? Does the new tax raise enough revenue for the government to compensate her for her loss?

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know