ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Suppose that the local government of Jacksonville decides to institute a tax on soda consumers. Before the tax, 45 million liters of soda were sold
every month at a price of $9 per liter. After the tax, 39 million liters of soda are sold every month; consumers pay $14 per liter (including the tax),
and producers receive $5 per liter.
The amount of the tax on a liter of soda is
that falls on producers is 5
per liter
True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers.
True
$5 per liter. Of this amount, the burden that falls on consumers is
False
per liter, and the burden
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Transcribed Image Text:Suppose that the local government of Jacksonville decides to institute a tax on soda consumers. Before the tax, 45 million liters of soda were sold every month at a price of $9 per liter. After the tax, 39 million liters of soda are sold every month; consumers pay $14 per liter (including the tax), and producers receive $5 per liter. The amount of the tax on a liter of soda is that falls on producers is 5 per liter True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on producers. True $5 per liter. Of this amount, the burden that falls on consumers is False per liter, and the burden
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