Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 15 million bottles of wine were sold every month at a price of $7 per bottle. After the tax, 9 million bottles of wine are sold every month; consumers pay $10 per bottle (including the tax), and producers receive $4 per bottle. 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.
Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 15 million bottles of wine were sold every month at a price of $7 per bottle. After the tax, 9 million bottles of wine are sold every month; consumers pay $10 per bottle (including the tax), and producers receive $4 per bottle. 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.
Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781305971509
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter6: Supply, Demand, And Government Policies
Section: Chapter Questions
Problem 5QR
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Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 15 million bottles of wine were sold every month at a price of $7 per bottle. After the tax, 9 million bottles of wine are sold every month; consumers pay $10 per bottle (including the tax), and producers receive $4 per bottle.
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.
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