-If a Unit Excise Tax Is Placed on a Good

question 65

Multiple Choice

-If a unit excise tax is placed on a good for which the demand is very unresponsive to a price change, then

• A) the government generally pays the majority of the tax.
• B) the consumers generally pay the majority of the tax.
• C) the producers generally pay the majority of the tax.
• D) producers and consumers pay equal portions of the tax.

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