Business

Wendy Kim

22 November, 20:57

Suppose that the U. S. government decides to charge beer consumers a tax. Before the tax, 25 million cases of beer were sold every month at a price of $7 per case. After the tax, 18 million cases of beer are sold every month; consumers pay $8 per case (including the tax), and producers receive $5 per case. The amount of the tax on a case of beer is $1 per case. Of this amount, the burden that falls on consumers is $ per case, and the burden that falls on producers is $ per case.

a. True b. False: The effect of the tax on the quantity sold would have been the same as if the tax had been levied on producers. a. True b. False