a tax decrease will decrease consumption a tax increase will increase consumption consumption and after-tax income are unrelated consumption varies inversely with after-tax incomes consumption varies directly with after-tax incomes

a tax decrease will decrease consumption a tax increase will increase consumption consumption and after-tax income are unrelated consumption varies inversely with after-tax incomes consumption varies directly with after-tax incomes

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter3: Demand Analysis

Section: Chapter Questions

Problem 11E: Federal excise taxes on gasoline vary widely across the developed world. The United States has the...

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Question

a tax decrease will decrease consumption

a tax increase will increase consumption

consumption and after-tax income are unrelated

consumption varies inversely with after-tax incomes

consumption varies directly with after-tax incomes

Consider the following table:
After-Tax Income
Consumption
$1000
2000
3000
4000
$900
1800
2700
3600
4500
5000
These data suggest that:

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