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The image contains a supply and demand graph (Figure 8-6) showing the impact of a tax. The vertical axis represents price, ranging from $2 to $22, and the horizontal axis represents quantity, from 0 to 600 units. The supply curve (S) and demand curve (D) intersect at equilibrium, with a tax imposed that creates a price wedge between what consumers pay and what producers receive.

The problem asks, "What would happen to consumer surplus if the tax were imposed on the buyers?" The four answer choices are:
1. It would fall by $900.
2. It would fall by $1800.
3. It would fall by $2700.
4. It would fall by $3600.

### Analyzing the Graph:
- The price consumers pay rises from $10 (before tax) to $16 (after tax).
- The quantity traded decreases from 600 units (before tax) to 300 units (after tax).
- The tax wedge, which is the vertical gap between the supply and demand curve, represents the tax amount.

### Consumer Surplus:
Consumer surplus is the area between the demand curve and the price that consumers pay. Before the tax, the price is $10, and after the tax, consumers pay $16. Since the quantity also decreases from 600 to 300, the triangular area representing consumer surplus shrinks significantly.

Let me break it down:
1. **Initial consumer surplus** (before tax):  
   It is the area of the triangle with a base of 600 (quantity) and a height of $22 (maximum willingness to pay) - $10 (market price).
   \[
   \text{Initial consumer surplus} = \frac{1}{2} \times 600 \times (22 - 10) = \frac{1}{2} \times 600 \times 12 = 3600
   \]

2. **New consumer surplus** (after tax):  
   After the tax is imposed, the price paid by consumers is $16, so the consumer surplus becomes:
   \[
   \text{New consumer surplus} = \frac{1}{2} \times 300 \times (22 - 16) = \frac{1}{2} \times 300 \times 6 = 900
   \]

3. **Change in consumer surplus**:  
   The decrease in consumer surplus is the difference between the initial and new consumer surplus:
   \[
   \text{Change in consumer surplus} = 3600 - 900 = 2700
   \]

Therefore, the correct answer is **"It would fall by $2700."**

Would you like a more detailed explanation on any part of this? 

### 5 Follow-up Questions:
1. What is producer surplus, and how would it change due to the tax?
2. How do taxes create deadweight loss in a market?
3. Can you explain how to calculate total tax revenue from the graph?
4. What is the difference between consumer surplus and total surplus?
5. How does the elasticity of supply and demand affect tax incidence?

### Tip:
When analyzing tax effects in supply-demand graphs, always pay attention to how the tax shifts the curves and how it impacts both consumer and producer surplus.

Refer to the figure. What would happen to the consumer surplus if the tax were imposed on the buyers?

This example analyzes the change in consumer surplus when a tax is imposed on buyers, using a supply and demand graph. The problem involves calculating the decrease in consumer surplus due to taxation, covering key concepts in consumer economics and market behavior.

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