Asked by
Alexandra Armas
on Oct 25, 2024
Verified
If an excise tax is imposed on automobiles and collected from consumers,the:
A) demand curve will shift downward by the amount of the tax.
B) supply curve will shift upward by the amount of the tax.
C) equilibrium quantity supplied will increase relative to the pretax level.
D) equilibrium quantity demanded will increase relative to the pretax level.
Equilibrium Quantity
The quantity of a good or service bought and sold at the equilibrium (or market-clearing) price.
Excise Tax
A tax imposed on specific goods, services, or activities, usually with the aim of reducing consumption or generating revenue.
Pretax Level
A financial figure or income amount before any taxes have been deducted.
- Determine the modification in supply and demand curves following taxation.
- Analyze the factors influencing the burden of tax between consumers and producers depending on the elasticity of demand and supply.
Verified Answer
FJ
Learning Objectives
- Determine the modification in supply and demand curves following taxation.
- Analyze the factors influencing the burden of tax between consumers and producers depending on the elasticity of demand and supply.
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