Suppose Buyers of Tequila Are Required to Send $1

question 84

Multiple Choice

Suppose buyers of tequila are required to send $1.00 to the government for every bottle of tequila they buy.Further,suppose this tax causes the effective price received by sellers of tequila to fall by $0.80 per bottle.Which of the following statements is correct?

• A) This tax causes the demand curve for tequila to shift downward by $1.00 at each quantity of tequila.
• B) The price paid by buyers is $0.20 per bottle more than it was before the tax.
• C) Eighty percent of the burden of the tax falls on sellers.
• D) All of the above are correct.

---

Definitions:

Demographic Trends

Observations and predictions related to changes in the statistical characteristics of populations over time, such as age, race, or gender distributions, which can impact workplace dynamics.

Trend Projection Forecasting

A statistical technique that uses historical data to predict future outcomes by identifying and analyzing past trends.

Extrapolation

The process of estimating, beyond the original observation range, the value of a variable on the basis of its relationship with another variable.

Predictive Analysis

The process of selecting, exploring, analyzing, and modeling data to create better business outcomes.