# 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 consumers.In the following graph, shows the effect of a \$0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve. DemandSupply01234563.02.52.01.51.00.50Price of Gasoline (Dollars per gallon)Quantity of Gasoline (Thousands of gallons)Demand   Supply    True or False: The effect of the tax will be the same regardless of whom the tax is imposed on.True False  This tax would be more effective in reducing the quantity of gasoline consumed if the demand for gasoline were    elastic. True or False: Consumers of gasoline are helped by this tax.True False  Workers in the oil industry are    by this tax.

Question
567 views
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 consumers.
In the following graph, shows the effect of a \$0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve.

DemandSupply01234563.02.52.01.51.00.50Price of Gasoline (Dollars per gallon)Quantity of Gasoline (Thousands of gallons)Demand   Supply

True or False: The effect of the tax will be the same regardless of whom the tax is imposed on.
True

False

This tax would be more effective in reducing the quantity of gasoline consumed if the demand for gasoline were    elastic.

True or False: Consumers of gasoline are helped by this tax.
True

False

Workers in the oil industry are    by this tax.

check_circle

Step 1

Hey, Thank you for the question. According to our policy we can only answer upto 3 subparts per session. If you need further help, post the question again and mention the number that you want us to solve.

Step 2

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.

Step 3

a.

The effect of tax will be the same and it would not matter whether the tax is imposed on producers or consumers. This statement is true. It can be shown by the graph below:

With no tax- demand-D, Supply-S, Price- P , Quantity- Q

If the tax is imposed on producers – Supply shifts to S1, Price paid- P1 , Quantity- Q1, Price received- P1-\$5...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in