5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 50 billion cases of cola were sold every year at a price of $6 per case. After the tax, 45 billion cases of cola are sold every year; consumers pay $8 per case (including the tax), and producers receive $5 per case. The amount of the tax on a case of cola is $ the burden that falls on producers is $ True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. O True per case. Of this amount, the burden that falls on consumers is $ per case. False per case, and

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5. Calculating tax incidence
Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 50 billion cases of cola were sold every year at a price of
$6 per case. After the tax, 45 billion cases of cola are sold every year; consumers pay $8 per case (including the tax), and producers receive $5 per
case.
The amount of the tax on a case of cola is $
the burden that falls on producers is $
True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers.
True
per case. Of this amount, the burden that falls on consumers is $
per case.
False
per case, and
Transcribed Image Text:5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 50 billion cases of cola were sold every year at a price of $6 per case. After the tax, 45 billion cases of cola are sold every year; consumers pay $8 per case (including the tax), and producers receive $5 per case. The amount of the tax on a case of cola is $ the burden that falls on producers is $ True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. True per case. Of this amount, the burden that falls on consumers is $ per case. False per case, and
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