The above figure shows the market for gourmet ice cream. In effort to reduce obesity, government places a $2 tax per gallon on suppliers in this market, shifting the supply curve from S0 to S1. The tax incidence is
A) split equally between consumers and producers, each paying $1 per gallon.
B) split equally between consumers and producers, each paying $2 per gallon.
C) such that consumers pay $2 per gallon and producers pay $1 per gallon.
D) such that consumers pay $1 per gallon and producers pay $2 per gallon.
E) such that producers pay all of the tax.
A
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Figure 9.1 shows three aggregate demand curves. A movement from point b to point a could be caused by a(n)
A) increase in government spending. B) decrease in the money supply. C) increase in taxes. D) increase in the price level.
High inflation
A) makes money function less well as a store of value. B) lowers the price level. C) leads to a more correct allocation of resources. D) decreases uncertainty. E) makes it easier to use money as a standard of account.
When firms focus on profit maximization, which form of wage discrimination is least likely to occur?
a. discrimination based on race b. discrimination in sports c. consumer discrimination d. discrimination based on educational attainment
If there is no change in price that can alter the quantity supplied, then the supply for the good is
A. perfectly inelastic. B. inelastic. C. perfectly unit elastic. D. perfectly elastic.