If a tax were placed on fruits, which of the following would be true about the burden of the tax? a. The tax will be split between consumers and producers, but the consumers will pay the majority of the tax. b. The tax will be split between consumers and producers, but the producers will pay the majority of the tax. c. Consumers will pay the entire tax. d. Producers will pay the entire tax.
If a tax were placed on fruits, which of the following would be true about the burden of the tax? a. The tax will be split between consumers and producers, but the consumers will pay the majority of the tax. b. The tax will be split between consumers and producers, but the producers will pay the majority of the tax. c. Consumers will pay the entire tax. d. Producers will pay the entire tax.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:QUESTION 65
Consider the following estimated elasticities regarding the supply and demand of fresh fruits and vegetables.
Price elasticity of demand for fruit
Price elasticity of supply for fruit
Price elasticity of demand for vegetables
Income elasticity of demand for fruit
Income elasticity of demand for vegetables
-0.70
1.60
-0.50
0.60
0.20
If a tax were placed on fruits, which of the following would be true about the burden of the tax?
a. The tax will be split between consumers and producers, but the consumers will pay the majority of the tax.
b. The tax will be split between consumers and producers, but the producers will pay the majority of the tax.
c. Consumers will pay the entire tax.
d. Producers will pay the entire tax.
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