Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 40,000...

Suppose that the U.S. government decides to charge wine consumers a tax. Before the tax, 40,000 bottles of wine were sold every week at a price of $4 per bottle. After the tax, 35,000 bottles of wine are sold every week; consumers pay $6 per bottle (including the tax), and producers receive $3 per bottle.

1. The amount of tax on a bottle of wine is $_______ per bottle. Of this amount, the burden that falls on the consumers is $________ per bottle, and the burden that falls on the producers is $________ per bottle.

2. True or False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers.

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ekkarill92 answered 1 year ago

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