Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $5 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $6 per case (including the tax), and producers receive $2 per case. The amount of the tax on a case of cola 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.
Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $5 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $6 per case (including the tax), and producers receive $2 per case. The amount of the tax on a case of cola 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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $5 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $6 per case (including the tax), and producers receive $2 per case.
The amount of the tax on a case of cola 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.
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