Asked by Mariah Trevino on Jun 01, 2024
Verified
(Figure: The Market for SUVs) Use Figure: The Market for SUVs.If the government imposes a $60,000 tax on SUVs and collects it from the consumers,the _____ curve will shift _____ by _____.
A) supply;upward;$30,000
B) supply;upward;$60,000
C) demand;downward;$30,000
D) demand;downward;$60,000
Demand Curve
The demand curve is a graphical representation showing how the quantity demanded of a good or service varies with its price, typically sloping downward from left to right.
Excise Tax
A tax imposed on the sale of specific goods or services, such as alcohol, cigarettes, and gasoline.
SUVs
Sport Utility Vehicles, a category of motor vehicles that combine elements of road-going passenger cars with features from off-road vehicles, like increased ground clearance and all-wheel drive.
- Acquire knowledge about the concept of tax incidence and the manner in which a tax's load is shared between buyers and sellers.
Verified Answer
ZK
Zybrea KnightJun 05, 2024
Final Answer :
D
Explanation :
A tax imposed on consumers for purchasing SUVs would increase the price of the product, leading to a decrease in demand. Thus, the demand curve will shift downward. The tax value is $60,000, which means that it will shift the curve exactly by that amount. Therefore, the best choice is D.
Learning Objectives
- Acquire knowledge about the concept of tax incidence and the manner in which a tax's load is shared between buyers and sellers.