Suppose that the local government of Corpus Christi decides to institute a tax on soda consumers. Before the tax, 40,000 liters of soda were sold every week at a price of $9 per liter. After the tax, 33,000 liters of soda are sold every week; consumers pay $14 per liter (including the tax), and producers receive $5 per liter. The amount of the tax on a liter of soda is that falls on producers is per liter. Of this amount, the burden that falls on consumers is per liter, and the burden per liter. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers. True O False
Suppose that the local government of Corpus Christi decides to institute a tax on soda consumers. Before the tax, 40,000 liters of soda were sold every week at a price of $9 per liter. After the tax, 33,000 liters of soda are sold every week; consumers pay $14 per liter (including the tax), and producers receive $5 per liter. The amount of the tax on a liter of soda is that falls on producers is per liter. Of this amount, the burden that falls on consumers is per liter, and the burden per liter. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers. True O False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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soda consumers. Before the tax, 40,000 liters of soda were sold every week at a price of $9 per liter. After the tax, 33,000 liters of soda are sold every week; consumers pay $14 per liter (including the tax), and producers receive $5 per liter. The amount of the tax an a liter af sada is per Iter. Of this amount, the burden that falls on consumers is per liter, and the burden that falls on producers is per liter. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied an producers. True False
Transcribed Image Text:Suppose that the local government of Corpus Christi decides to institute a tax on soda consumers. Before the tax, 40,000 liters of soda were sold
every week at a price of $9 per liter. After the tax, 33,000 liters of soda are sold every week; consumers pay $14 per liter (including the tax), and
producers receive $5 per liter.
The amount of the tax on a liter of soda is
that falls on producers is
per liter. Of this amount, the burden that falls on consumers is
per liter, and the burden
per liter.
True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers.
True
O False
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