Suppose Buyers of Vodka Are Required to Send $5

question 134

Multiple Choice

Suppose buyers of vodka are required to send $5.00 to the government for every bottle of vodka they buy.Further,suppose this tax causes the effective price received by sellers of vodka to fall by $3.00 per bottle.Which of the following statements is correct?

• A)This tax causes the demand curve for vodka to shift downward by $5.00 at each quantity of vodka.
• B)The price paid by buyers is $2.00 per bottle more than it was before the tax.
• C)Sixty percent of the burden of the tax falls on sellers.
• D)All of the above are correct.

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Definitions:

Dissolved

The process of legally disbanding a corporation or partnership, effectively ending its existence.

Errand Runner

A person or service engaged to perform small tasks or deliveries.

Implied Authority

A form of authority of an agent that is not explicitly stated but is assumed to be granted as part of the agent's duties.

Winding Up

The process of closing down a company by settling its liabilities and distributing any remaining assets to its shareholders.