Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 20 million bottles of wine were sold every month at a price of $5 per bottle. After the tax, 13 million bottles of wine are sold every month; consumers pay $6 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is ____ per bottle. Of this amount, the burden that falls on consumers is ____ per bottle, and the burden that falls on producers is _____ per bottle. (Answer all)True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers. 4. Calculating tax incidenceSuppose that the U.S. government decides to charge wine producers a tax. Before the tax, 20 million bottles of wine were sold every month at a priceof $5 per bottle. After the tax, 13 million bottles of wine are sold every month; consumers pay $6 per bottle, and producers receive $3 per bottle(after paying the tax).The amount of the tax on a bottle of wine is $burden that falls on producers is $per bottle. Of this amount, the burden that falls on consumers is $per bottle, and theper bottle.True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.TrueFalse

Tax burden=Amount consumers pay after tax-Amount producers receive after tax paymentTax burden on…

Answered: Suppose that the U.S. government…

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter6: Supply, Demand And Government Policies

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Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 20 million bottles of wine were sold every month at a price of $5 per bottle. After the tax, 13 million bottles of wine are sold every month; consumers pay $6 per bottle, and producers receive $3 per bottle (after paying the tax).

The amount of the tax on a bottle of wine is ____ per bottle. Of this amount, the burden that falls on consumers is ____ per bottle, and the burden that falls on producers is _____ per bottle. (Answer all)

True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.

4. Calculating tax incidence
Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 20 million bottles of wine were sold every month at a price
of $5 per bottle. After the tax, 13 million bottles of wine are sold every month; consumers pay $6 per bottle, and producers receive $3 per bottle
(after paying the tax).
The amount of the tax on a bottle of wine is $
burden that falls on producers is $
per bottle. Of this amount, the burden that falls on consumers is $
per bottle, and the
per bottle.
True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.
True
False

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