True or False: Suppliers' ability to pass on an excise tax to demanders depends on the strength of demand. If the demand curve is very high, a large percentage of the excise tax will be passed on, whereas if demand is very low, suppliers will have to pay most of the tax themselves.
Answer to relevant QuestionsSuppose an excise tax of 10¢ per apple would cause the price of apples to rise from 20¢ apiece to 23¢ apiece. What would be the effect of a sales tax of 10¢ per apple?Suppose that you like to own both left and right shoes, but that a right shoe is of no use to you unless you own a matching left one, and vice versa. Draw your indifference curves between left and right shoes.Suppose the only good you ever consume is Nestle's Crunch bars. What is your income elasticity of demand for Nestle's Crunch bars? What is your price elasticity of demand for Nestle's Crunch bars?The demand and supply curves for gasoline are the same in Upper Slobbovia as in Lower Slobbovia. However, in Upper Slobbovia everybody's time is worth just $1 per hour, while in Lower Slobbovia everybody's time is worth $10 ...John bought a refrigerator and sold it 3 years later for exactly what he paid for it. True or False: It cost John nothing to have the use of the refrigerator for 3 years.
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