Question

In: Economics

Suppose that in Canada the government places a​ $1,500 tax on the buyers of new snowmobiles....

Suppose that in Canada the government places a​ $1,500 tax on the buyers of new snowmobiles. After the purchase of a new​ snowmobile, a buyer must pay the government​ $1,500. How would the imposition of the tax on buyers be illustrated in a​ graph?

A.

The tax will shift the demand curve up by​ $1,500.

B.

The tax will shift the demand curve down by​ $1,500.

C.

The tax will shift the demand up by​ $1,500 and supply curve down by​ $1,500.

D.

The tax will shift the supply curve up by​ $1,500.

Solutions

Expert Solution

The answer is B- The tax will shift the demand curve down by​ $1,500.

Suppose that in Canada the government places a​ $1,500 tax on the buyers of new snowmobiles. After the purchase of a new​ snowmobile, a buyer must pay the government​ $1,500. How would the imposition of the tax on buyers be illustrated in a​ graph

The tax will shift the demand curve down by​ $1,500.

Rahul Sunny answered 2 years ago
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