In the Following Graph, If a $15 Excise Tax Is

question 41

Multiple Choice

In the following graph, if a $15 excise tax is placed on the sale of every bungee jump, the new price that consumers will pay is _____, and the incidence of the tax falls more heavily on _____.

• A) $75; buyers
• B) $75; sellers
• C) $60; buyers
• D) $60; sellers

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Definitions:

Consumer Surplus

The difference between what consumers are willing to pay for a good or service versus what they actually pay.

Federal Trade Commission

The Federal Trade Commission is a United States federal agency established to protect consumers and promote competition by preventing anticompetitive, deceptive, and unfair business practices.

Sherman Antitrust Act

A landmark federal statute passed in 1890 in the United States, which prohibits monopolistic business practices and aims to promote competition.

Sherman Act

A foundational antitrust law in the United States that prohibits monopolistic practices and promotes competition, enacted in 1890.