6. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40,000 cases of cola were sold every week at a price of $7 per case. After the tax, 34,000 cases of cola are sold every week; consumers pay $10 per case (including the tax), and producers receive $4 per case. | per case. Of this amount, the burden that falls on consumers iss The amount of the tax on a case of cola iss that falls on producers iss per case, and the burden per case. 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 O False
6. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40,000 cases of cola were sold every week at a price of $7 per case. After the tax, 34,000 cases of cola are sold every week; consumers pay $10 per case (including the tax), and producers receive $4 per case. | per case. Of this amount, the burden that falls on consumers iss The amount of the tax on a case of cola iss that falls on producers iss per case, and the burden per case. 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 O False
Chapter1: Making Economics Decisions
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Transcribed Image Text:6. Calculating tax incidence
Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40,000 cases of cola were sold every week at a price of $7
per case. After the tax, 34,000 cases of cola are sold every week; consumers pay $10 per case (including the tax), and producers receive $4 per case.
| per case. Of this amount, the burden that falls on consumers iss
The amount of the tax on a case of cola iss
that falls on producers iss
per case, and the burden
per case.
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
O False
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