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Suppose that the US. government decides to charge beer consumers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of 14 per case After the tax, 3,000 cases of beer are sold every week; consumers pay $5 per case (induding the tax), and producers receive $2 per case The amount of the tax on a case of beer is burden that fallis on producers is s Joer cane. of this amount, the burden that fals on consumers is per cane. per case, and the True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers O true O Fae

Suppose that the US. government decides to charge beer consumers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of 14 per case After the tax, 3,000 cases of beer are sold every week; consumers pay $5 per case (induding the tax), and producers receive $2 per case The amount of the tax on a case of beer is burden that fallis on producers is s Joer cane. of this amount, the burden that fals on consumers is per cane. per case, and the True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers O true O Fae

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand And Government Policies
Section: Chapter Questions
Problem 5QR
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5. Calculating tax incidence Suppose that the US. government decides to charge beer consumers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 3,000 cases of beer are sold every week; consumers pay $5 per case (including the tax), and producers recelve $2 per Case The amount of the tax on a case of beer is s per case. of this amount, the burden that falls on consumers is s per case, and the burden that falls on producers is per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers les or O True O False
Transcribed Image Text:5. Calculating tax incidence Suppose that the US. government decides to charge beer consumers a tax. Before the tax, 10,000 cases of beer were sold every week at a price of $4 per case. After the tax, 3,000 cases of beer are sold every week; consumers pay $5 per case (including the tax), and producers recelve $2 per Case The amount of the tax on a case of beer is s per case. of this amount, the burden that falls on consumers is s per case, and the burden that falls on producers is per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers les or O True O False
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