Suppose each of the 1 million Islandian households has the same demand curve for heating oil. How much consumer surplus would each household lose if it had to pay $2 per gallon instead of $1 per gallon for heating oil, assuming there were no other changes in the household budget? How much $ per year.

With the money saved by not subsidizing oil, by how much could the Islandian government afford to cut each family’s annual taxes?

Instructions: Enter your response rounded to two decimal places.

How much $ per year.

If the government abandoned its oil subsidy and implemented the tax cut, by how much would each family be better off?

How much $ per year.