Consider the market for gasoline illustrated in the figure to the right. Suppose the market is perfectly competitive and initially in equilibrium. Now suppose the government imposes a gasoline tax of $1.50 to be paid for by producers. The effect of this tax is illustrated in the figure to the right. Who bears the burden of the tax? Consumers pay $ of the $1.50 tax (enter a numeric response using a real number rounded to two decimal places) and producers pay $ ☐ of th Question Viewer 7.00- 6.50- 6.00- 5.50- 5.00- 4.50- 4.00- 3.50- 3.00- 2.50- 2.00- Price of gasoline (dollars per gallon) 1.50- 1.00- 0.50- 0.00 -0 10 -20 D -80 30 40 50 60 70 80 Quantity of gasoline 90
Consider the market for gasoline illustrated in the figure to the right. Suppose the market is perfectly competitive and initially in equilibrium. Now suppose the government imposes a gasoline tax of $1.50 to be paid for by producers. The effect of this tax is illustrated in the figure to the right. Who bears the burden of the tax? Consumers pay $ of the $1.50 tax (enter a numeric response using a real number rounded to two decimal places) and producers pay $ ☐ of th Question Viewer 7.00- 6.50- 6.00- 5.50- 5.00- 4.50- 4.00- 3.50- 3.00- 2.50- 2.00- Price of gasoline (dollars per gallon) 1.50- 1.00- 0.50- 0.00 -0 10 -20 D -80 30 40 50 60 70 80 Quantity of gasoline 90
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider the market for gasoline illustrated in the figure to
the right. Suppose the market is perfectly competitive and
initially in equilibrium.
Now suppose the government imposes a gasoline tax of
$1.50 to be paid for by producers. The effect of this tax is
illustrated in the figure to the right.
Who bears the burden of the tax?
Consumers pay $
of the $1.50 tax (enter a numeric
response using a real number rounded to two
decimal places) and producers pay $ ☐ of th Question Viewer
7.00-
6.50-
6.00-
5.50-
5.00-
4.50-
4.00-
3.50-
3.00-
2.50-
2.00-
Price of gasoline (dollars per gallon)
1.50-
1.00-
0.50-
0.00
-0
10
-20
D
-80
30 40 50 60 70 80
Quantity of gasoline
90
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