7. Problems and Applications Q7 Congress and the president decide that the United States should reduce air pollution by reducing its use of gasoline. They impose a $0.50 tax on each gallon of gasoline sold. Suppose they decided to impose the tax on producers. In the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on producers by shifting the demand or supply curve. Price of Gasoline (Dollars per gallon) 3.0 2.5 2.0 1.5 1.0 0.5 0 0 O True O False O True Supply 1 2 5 Quantity of Gasoline (Thousands of gallons) 3 O False Demand True or False: The effect of the tax will be the same regardless of whom the tax is imposed on. If the demand for gasoline were more elastic, this tax would be True or False: Consumers of gasoline are helped by this tax. Workers in the oil industry are 6 by this tax. Demand Supply ? ▼ effective in reducing the quantity of gasoline consumed.

7. Problems and Applications Q7 Congress and the president decide that the United States should reduce air pollution by reducing its use of gasoline. They impose a $0.50 tax on each gallon of gasoline sold. Suppose they decided to impose the tax on producers. In the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on producers by shifting the demand or supply curve. Price of Gasoline (Dollars per gallon) 3.0 2.5 2.0 1.5 1.0 0.5 0 0 O True O False O True Supply 1 2 5 Quantity of Gasoline (Thousands of gallons) 3 O False Demand True or False: The effect of the tax will be the same regardless of whom the tax is imposed on. If the demand for gasoline were more elastic, this tax would be True or False: Consumers of gasoline are helped by this tax. Workers in the oil industry are 6 by this tax. Demand Supply ? ▼ effective in reducing the quantity of gasoline consumed.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter19: Elasticity

Section: Chapter Questions

Problem 4QP

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Under which circumstances does line tax burden fall entirely on consumers?
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