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billyhilly billyhilly
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5 years ago Edited: 5 years ago, bio_man

Question 1.

Suppose the demand curve for a product is horizontal and the supply curve is upward sloping. If a per-unit tax is imposed in the market for this product,

• sellers bear the entire burden of the tax.

• the tax burden will be shared among the government, buyers, and sellers.

• buyers bear the entire burden of the tax.

• the tax burden will be shared by buyers and sellers.

Question 2.

Figure 4-9




Refer to Figure 4-9. Suppose the market is initially in equilibrium at price P1 and now the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax? For demand curve D1

• the producer bears a greater share of the tax burden if the supply curve is S2.

• the producer bears a greater share of the tax burden if the supply curve is S1.

• the producer's share of the tax burden is the same whether the supply curve is S1 or S2.

• the producer bears the entire burden of the tax if the supply curve is S1 and the consumer bears the entire burden of the tax if the supply curve is S2.
Textbook 
Microeconomics

Microeconomics


Edition: 7th
Authors:
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beunikuelbeunikuel
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