When a sales tax is imposed on sellers, the supply curve shifts so that the vertical distance between the old and the new supply curve equals the
A) sales tax multiplied by the price elasticity of demand.
B) sales tax multiplied by the price elasticity of supply.
C) amount of the sales tax.
D) sales tax divided by the price elasticity of demand.
C
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When a worker quits a job to look for a better job
A) structural and cyclical unemployment increase. B) structural unemployment decreases. C) cyclical unemployment increases. D) frictional unemployment increases.
The __________________is the sum of the fixed and variable costs.
Fill in the blank(s) with the appropriate word(s).
If the demand elasticity for corn is -0.5, then a 5% increase in the quantity demanded to the market will result in a price change of
A. +5% B. +10% C. -5% D. -10%
Answer the following statements true (T) or false (F)
1) Demand shocks may be positive or negative. 2) "Supply shocks" occur any time there is a change in the supply of goods and services. 3) Economists believe that most short-run fluctuations in output are the result of supply shocks. 4) Demand shocks cause problems in the macroeconomy primarily because prices are sticky.