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 $7 per bottle. After the tax, 35 billion bottles of wine are sold every year; consumers pay $9 per bottle, and producers receive $6 per bottle (after paying the tax). The amount of the tax on a bottle of wine isper bottle. Of this amount, the burden that falls on consumers isper bottle, and the burden that falls on producers isper bottle. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers.

Answer and Explanation:

The computation is shown below:

The amount of the tax for the wine bottle is

= $9 per bottle - $6 per bottle

= $3 per bottle

Before the tax, the price per bottle is $7 per bottle

The Tax burden on consumers is

= $9 - $7

= $2 per bottle

And, the tax burden on producers is

= $7 per bottle - $6 per bottle

= $1 per bottle

So, the given statement is false as the impact would remain the same whether it is for producer or consumer

the answer is     d. in our global economy, most job growth will be in services, but manufacturing jobs will exist, too.

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