Asked by Aseel Babedain on Jun 24, 2024
Verified
(Figure: The Market for SUVs) Use Figure: The Market for SUVs.If the government imposes a $30,000 tax on SUVs and collects it from the SUV suppliers,the _____ curve will shift _____ by _____.
A) demand;downward;$15,000
B) supply;upward;$15,000
C) supply;upward;$30,000
D) demand;downward;$30,000
Supply Curve
A graphical representation showing the relationship between the price of a good and the quantity supplied at those prices.
Excise Tax
A tax charged on specific goods, such as tobacco and alcohol, typically imposed by the government to regulate or discourage their consumption.
SUV Suppliers
SUV suppliers are manufacturers or vendors that provide sport utility vehicles to the consumer market.
- Understand the concept of excise taxes and how they affect market equilibrium.
- Comprehend the principle of tax incidence and the distribution of tax burdens between purchasers and vendors.
Verified Answer
SC
Shawn CrowderJun 27, 2024
Final Answer :
C
Explanation :
A tax on SUVs would increase the cost of production for the SUV suppliers, causing the supply curve to shift upward. The amount of the tax is $30,000, which is the magnitude of the upward shift. The demand curve would not shift in response to the tax.
Learning Objectives
- Understand the concept of excise taxes and how they affect market equilibrium.
- Comprehend the principle of tax incidence and the distribution of tax burdens between purchasers and vendors.