The tax places a wedge between the price buyers pay and the price sellers receive. 200 180 160 140 Demand Supply

. A tax on umbrellas will most likely Select one: a. fall mostly on the umbrella buyers rather than the producers. b. be an effective way to tax those who don’t earn enough to pay income taxes. c. cause a large decline in the sales of umbrellas because demand is elastic. d. raise large amounts of tax revenue for the government.

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The current market price of bananas is $1 per pound. Use a graph and words to show the effect of a ten cent tax on each pound of bananas. Insert your own numbers into your graph. Be sure to indicate the new price paid by consumers, the new price received by sellers, and the new quantity sold.

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Marked out of1.00 When the price elasticity of demand is high and the price elasticity of supply is low, the burden of a tax falls primarily or Select one. a. buyers of the product. b. both buyers and sellers of the product equally C. the tax payers. d. sellers of the product. CLEAR MY CHOICE

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Using the supply and demand data for wheat below, what would happen if the government placed a $3 per bushel tax on wheat? Bushels demanded 45 50 56 61 67 Price per bushel $6 $5 $4 LA LA LA $3 $2 Bushels supplied 77 73 68 61 57 O the producer price would fall, the consumer price would rise, and the quantity sold would increase. The producer price would fall, the consumer price would rise, and the equilibrium quantity would fall O Both the consumer price and the producer price would rise the consumer price would rise by less than $3 while the producer price would fall by more than $3 O the equilibrium consumer price would rise by $3

Use Exhibit to answer question a. A. b. C. c. B. d. B + C + E + F. Price e. C + F. 22 PB Po Ps I FIBI U O Size of tax per unit 'm/ F If a tax is placed on the product in this market, tax revenue paid by the sellers is the area Qo Supply Demand Quantity

A sales tax is imposed on good A. The supply of good A is not perfectly elastic or perfectly inelastic. Suppose that the demand for good A becomes more inelastic. (a) Will the tax burden on sellers increase or decrease? (b) Will the DWL increase or decrease?