Use the Figure Below to Answer the Following Question(s)

question 259

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 4-7
-Refer to Figure 4-7. The supply curve S₁ and the demand curve D indicate initial conditions in the market for gasoline. A $.60-per-gallon excise tax on gasoline is levied. How much revenue does the $.60-per-gallon tax generate for the government?

• A) $40 billion
• B) $48 billion
• C) $50 billion
• D) $60 billion

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Definitions:

Journal Entry

A record in accounting that notes transactions and changes in financial statements.

Net Pay

The amount of money an employee takes home after all deductions, such as taxes and benefits, are taken out of their gross salary.

FICA Tax

Federal Insurance Contributions Act tax; a United States federal payroll (or employment) tax imposed on both employees and employers to fund Social Security and Medicare.

Federal Income Taxes

Federal income taxes are taxes levied by the national government on taxable income of individuals, corporations, trusts, and other legal entities.