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Figure 162 Figure 16

Question 71

Multiple Choice

Figure 16.2 Figure 16.2   Figure 16.2 shows a demand curve and two sets of supply curves, one set more elastic than the other. -Refer to Figure 16.2.If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax A) is P<sub>a</sub><sub> </sub>- P<sub>d</sub><sub> </sub>under either supply curve. B) is P<sub>b</sub><sub> </sub>- P<sub>e</sub><sub> </sub>under either supply curve. C) is P<sub>a</sub><sub> </sub>- P<sub>d</sub> if the supply curve is S<sub>0</sub> and P<sub>b</sub><sub> </sub>- P<sub>e</sub><sub> </sub>if the supply curve is S<sub>1</sub>. D) is P<sub>c</sub><sub> </sub>- P<sub>d</sub> if the supply curve is S<sub>0</sub> and P<sub>c</sub><sub> </sub>- P<sub>e</sub><sub> </sub>if the supply curve is S<sub>1</sub>. Figure 16.2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 16.2.If the government imposes an excise tax of $1.00 on every unit sold, the producer's burden of the tax


A) is Pa - Pd under either supply curve.
B) is Pb - Pe under either supply curve.
C) is Pa - Pd if the supply curve is S0 and Pb - Pe if the supply curve is S1.
D) is Pc - Pd if the supply curve is S0 and Pc - Pe if the supply curve is S1.

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