When a tax per unit is placed on the buyer of a good: a the equilibrium price falls and the total amount spent by the buyer decreases if demand is elastic. b when prices increase from the tax, the supply increases because of the higher price. c the buyer and seller share the burden of the tax with the seller receiving relatively less and the buyer paying relatively more. d the seller charges all of the tax to the buyer since the tax was not placed on the seller.
When a tax per unit is placed on the buyer of a good: a the equilibrium price falls and the total amount spent by the buyer decreases if demand is elastic. b when prices increase from the tax, the supply increases because of the higher price. c the buyer and seller share the burden of the tax with the seller receiving relatively less and the buyer paying relatively more. d the seller charges all of the tax to the buyer since the tax was not placed on the seller.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question 6
When a tax per unit is placed on the buyer of a good:
a
the equilibrium price falls and the total amount spent by the buyer decreases if demand is elastic.
b
when prices increase from the tax, the supply increases because of the higher price.
c
the buyer and seller share the burden of the tax with the seller receiving relatively less and the buyer paying relatively more.
d
the seller charges all of the tax to the buyer since the tax was not placed on the seller.
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