contestada

Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 25 billion cases of cola were sold every year at a price of $5 per case. After the tax, 18 billion cases of cola are sold every year; consumers pay $6 per case (including the tax), and producers receive $3 per case.

The amount of the tax on a case of cola is ___________ $ per case. Of this amount, the burden that falls on consumers is __________$ per case, and the burden that falls on producers is ____________$ per case.

The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.

a. True
b. False