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
Chapter4: Supply And Demand: An Initial Look
Section: Chapter Questions
Problem 3TY
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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
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