Define an Excise Tax and Give Three Examples

question 27

Essay

Define an excise tax and give three examples. Explain the relationship between a tariff and an excise tax. Use supply and demand analysis to explain why the equilibrium price of apples will rise and the equilibrium quantity will fall if an excise tax is levied on apples. Explain why the price of apples will not rise by the full amount of the tax.

---

Definitions:

Fulfillment

The achievement of something desired, promised, or predicted; satisfaction or realization of a need or desire.

Wish

A desire or hope for something to happen or be the case, often without an expectation of actual realization.

Rapid Eye Movements

Quick movements of the eyes that occur during certain stages of sleep, particularly REM sleep, which is associated with dreaming.

Contradictory Information

refers to data or statements that are in direct opposition to each other, making it impossible for both to be true at the same time.