Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 35 billion cases of beer were sold every year at a price of $6 per case. After the tax, 28 billion cases of beer are sold every year; consumers pay $7 per case (including the tax), and producers receive $4 per case. The amount of the tax on a case of beer is $ _________ per case. Of this amount, the burden that falls on consumers is $_________ per case, and the burden that falls on producers is $___________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 False
Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 35 billion cases of beer were sold every year at a price of $6 per case. After the tax, 28 billion cases of beer are sold every year; consumers pay $7 per case (including the tax), and producers receive $4 per case. The amount of the tax on a case of beer is $ _________ per case. Of this amount, the burden that falls on consumers is $_________ per case, and the burden that falls on producers is $___________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 False
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that the U.S. government decides to charge beer consumers a tax. Before the tax, 35 billion cases of beer were sold every year at a
The amount of the tax on a case of beer is $ _________ per case. Of this amount, the burden that falls on consumers is $_________ per case, and the burden that falls on producers is $___________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
False
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