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Question: attempts1 average 12 5 calculating tax incidence suppose that the...

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Attempts:1 Average: 1/2 5. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 40 billion bottles of wine were sold every year at a price of $5 per bottle. After the tax, 34 billion bottles of wine are sold every year; consumers pay $6 per bottle, and producers receive $2 per bottle (after paying the tax) The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is Sper bottle, and the burden that falls on producers is per bottle. True or False: The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers. True False

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