Suppose Buyers of Fountain Drinks Are Required to Send $0

question 3

Multiple Choice

Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy.Further,suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.20 per drink.Which of the following statements is correct?

• A)This tax causes the demand curve for fountain drinks to shift downward by $0.50 at each quantity.
• B)The price paid by buyers is $0.30 per drink more than it was before the tax.
• C)Forty percent of the burden of the tax falls on sellers.
• D)All of the above are correct.

---

Definitions:

Limited Liability Company

An organizational model blending the direct taxation advantage of partnerships or sole proprietorships with the restricted liability characteristic of corporations.

Limited Partnership

A limited partnership is a form of partnership consisting of at least one general partner, who manages the business and is personally liable for partnership debts, and one or more limited partners, who are liable only to the extent of their investments.

Policies

Formal guidelines or rules established by organizations to govern decision-making and establish boundaries for behavior.

Procedures

refer to established ways of doing things; these are step-by-step instructions or guidelines designed to achieve specific tasks or outcomes.