Price (dollars per pizza) 20 16 14 12 10 8 6 4 2 O S+ tax on sellers S D 10 20 30 40 50 60 70 80 90 100 Quantity (thousands of pizzas) The figure above shows the pizza market in the city of Pepperoniville. If the government imposes the sales tax shown in the figure on sellers, then the price the buyer pays for pizza is $ and the price the seller receives for the pizza is $ Just enter value. Do not include the "$" sign.

5. Calculating tax incidence Suppose that the local government of Santa Fe decides to institute a tax on seltzer consumers. Before the tax, 20,000 packs of seltzer were sold ever week at a price of $11 per pack. After the tax, 14,000 packs of seltzer are sold every week; consumers pay $14 per pack (including the tax), and producers receive $7 per pack. The amount of the tax on a pack of seltzer is $ burden that falls on producers is $ O True per pack. 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. False per pack. Of this amount, the burden that falls on consumers is $ per pack, and the

Assume that the graph below reflects the market for pack of cigarettes in Virginia. The vertical axis is the price of a pack of cigarettes and the horizontal axis is the packs of cigarettes in thousands. 11 10 If the state of Virginia imposes a $6 sales tax on a pack of cigarettes and as a result, consumers pay $9 for a pack of cigarettes, then" suppliers are paying 33 percent of the tax and the state will take in $60,000 in tax revenue. consumers are paying 67 percent of the tax and the state will take in $280,000 in tax revenue. consumers are paying 67 percent of the tax and the state will take in $120,000 in tax revenue. suppliers are paying 33 percent of the tax and the state will take in $180,000 in tax revenue. O O 10 20 30 40 50 60 70 80 90 100 110 120 Q ·OO

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