This tax would be less effective in reducing the quantity of gasoline consumed if the demand for gasoline were True or False: Consumers of gasoline are hurt by this tax. True False Workers in the oil industry are by this tax. elastic.
This tax would be less effective in reducing the quantity of gasoline consumed if the demand for gasoline were True or False: Consumers of gasoline are hurt by this tax. True False Workers in the oil industry are by this tax. elastic.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Ab 8
Economics

Transcribed Image Text:This tax would be less effective in reducing the quantity of gasoline consumed if the demand for gasoline were elastic.
True or False: Consumers of gasoline are hurt by this tax.
O True
False
Workers in the oil industry are
by this tax.

Transcribed Image Text:Congress and the president decide that the United States should reduce air pollution by reducing its use of gasoline. They impose a $0.50 tax on each
gallon of gasoline sold.
Suppose they decided to impose the tax on producers.
In the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on producers by shifting the demand or supply curve.
Price of Gasoline (Dollars per gallon)
3.0
2.5
0
0
O True
3
False
Supply
Demand
1
2
5
Quantity of Gasoline (Thousands of gallons)
6
Demand
True or False: The effect of the tax will be the same regardless of whom the tax is imposed on.
Supply
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