Question: Use the graph below to answer the next four questions. A tax on buyers has shifted the demand from D 1 to D 2 .

Use the graph below to answer the next four questions. A tax on buyers has shifted the demand from D1 to D2.
4. How much is the tax?
A. $1 per unit
B. $2 per unit
C. $3 per unit
D. $6 per unit
5. Before the tax, the "price on the price tag" was $6. After the tax, the price on the price tag is (As we did in class, assume the price on the price tag does not include tax. This is similar to how prices shown at Target are pre-tax prices)
A. $4
B. $6
C. $8
D. $9
6. On a per-unit basis, how is the economic burden shared between the buyer and the seller?
A. Buyer pays $0, seller pays $3
B. Buyer pays $1, seller pays $2
C. Buyer pays $2. seller pays $1
D. Buyer pays $3, seller pays $0
 Use the graph below to answer the next four questions. A

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!