Use the figure below to answer the following questions. Figure 6.3.1
-Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.On each frisbee,the buyers' share of the tax is
A)$0.40.
B)$0.60.
C)$1.00.
D)$5.60.
E)$6.60.

Question

Use the figure below to answer the following questions.  Figure 6.3.1
-Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.On each frisbee,the buyers' share of the tax is
A)$0.40. 
B)$0.60. 
C)$1.00. 
D)$5.60. 
E)$6.60.

Quizplus · Accepted Answer

In the figure, the demand curve shifts downward by the amount of the tax, indicating that consumers are less willing and able to buy frisbees at any given price. The supply curve does not shift, indicating that producers are still willing to sell the same quantity of frisbees at each price, but they now receive a lower price from consumers after paying the tax. The difference between the price paid by consumers and the price received by producers is the amount of the tax, which is $1.20. Since the supply curve is a straight line with a slope of 0.60, we know that each frisbee sold results in producers paying $0.60 of the tax and consumers paying the remaining $0.60. Therefore, the buyers' share of the tax on each frisbee is $0.60.

Use the Figure Below to Answer the Following Questions