A $0.50 tax on lemons currently generates $200 in revenues per day.If the tax were increased to $2,the revenues generated would drop to $70.This tells you that in this range of tax rates the:
A) quantity effect outweighs the price effect.
B) quantity effect outweighs the income effect.
C) price effect outweighs the quantity effect.
D) price effect outweighs the income effect.
Correct Answer:
Verified
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A) always raises tax revenues.
B) always
Q76: If the price effect outweighs the quantity
Q77: The _ tells us when the government
Q78: The idea that people change their behavior
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Q81: The burden of a tax placed on
Q82: The economic incidence of the tax means
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Q84: When policy makers are deciding where to
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