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 consumers. In the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve. DemandSupply01234563.02.52.01.51.00.50Price of Gasoline (Dollars per gallon)Quantity of Gasoline (Thousands of gallons)Demand Supply True or False: The effect of the tax will be the same regardless of whom the tax is imposed on. True False This tax would be more effective in reducing the quantity of gasoline consumed if the demand for gasoline were elastic. True or False: Consumers of gasoline are helped by this tax. True False Workers in the oil industry are by this tax.
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 consumers. In the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve. DemandSupply01234563.02.52.01.51.00.50Price of Gasoline (Dollars per gallon)Quantity of Gasoline (Thousands of gallons)Demand Supply True or False: The effect of the tax will be the same regardless of whom the tax is imposed on. True False This tax would be more effective in reducing the quantity of gasoline consumed if the demand for gasoline were elastic. True or False: Consumers of gasoline are helped by this tax. True False Workers in the oil industry are by this tax.
Chapter4: Markets In Action
Section: Chapter Questions
Problem 18SQ
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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 consumers.
In the following graph, shows the effect of a $0.50 tax on each gallon of gasoline sold imposed on consumers by shifting the demand or supply curve.
DemandSupply01234563.02.52.01.51.00.50Price of Gasoline (Dollars per gallon)Quantity of Gasoline (Thousands of gallons)Demand Supply
True or False: The effect of the tax will be the same regardless of whom the tax is imposed on.
True
False
This tax would be more effective in reducing the quantity of gasoline consumed if the demand for gasoline were elastic.
True or False: Consumers of gasoline are helped by this tax.
True
False
Workers in the oil industry are by this tax.
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