Suppose That a Specific Tax of $3 Is Imposed on Consumers

question 51

Multiple Choice

Suppose that a specific tax of $3 is imposed on consumers of bread.The bread market supply is Qs = 10 + 0.5P and the bread market demand is Qd = 100-P.What is the consumers' tax burden?

• A) Consumers' tax burden is $1.30.
• B) Consumers' tax burden is $1.00.
• C) Consumers' tax burden is $1.50.
• D) Consumers' tax burden is $0.30

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Definitions:

Glucose

A basic form of sugar that serves as a crucial source of energy for living beings and is found in numerous carbohydrates.

Leptin

A hormone primarily produced by fat cells and the small intestine that regulates energy balance by inhibiting hunger, thereby modulating food intake and long-term energy expenditure.

Insulin

A hormone produced by the pancreas that regulates blood sugar levels by facilitating the uptake of glucose into tissues.

Physiological Basis

Refers to the underlying biological mechanisms and processes that support the functioning of living organisms.