Table of contents

0. Basic Principles of Economics1h 5m
1. Reading and Understanding Graphs59m
2. Introductory Economic Models1h 10m
3. The Market Forces of Supply and Demand2h 26m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Floors3h 45m
6. Introduction to Taxes and Subsidies1h 46m
7. Externalities1h 12m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. The Costs of Production2h 35m
11. Perfect Competition2h 23m
12. Monopoly2h 13m
13. Monopolistic Competition1h 9m
14. Oligopoly1h 26m
15. Markets for the Factors of Production1h 26m
16. Income Inequality and Poverty35m
17. Asymmetric Information, Voting, and Public Choice39m
18. Consumer Choice and Behavioral Economics1h 16m

6. Introduction to Taxes and Subsidies

Introducing Taxes and Tax Incidence

Microeconomics

6. Introduction to Taxes and Subsidies

Introducing Taxes and Tax Incidence

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Multiple Choice

A tax was levied upon buyers of a good. What is the amount sellers receive after the tax is imposed?

None of the above

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Verified step by step guidance

Identify the initial equilibrium point where the supply curve (S) and the original demand curve (D) intersect. This is the point before the tax is imposed.

Observe the new demand curve (D + tax) which represents the demand after the tax is levied on buyers. The tax shifts the demand curve downward by the amount of the tax.

Find the new equilibrium point where the supply curve (S) intersects with the new demand curve (D + tax). This intersection determines the new equilibrium quantity and the price buyers pay after the tax.

Determine the price sellers receive after the tax by looking at the vertical distance between the original demand curve (D) and the new demand curve (D + tax) at the new equilibrium quantity. This distance represents the tax amount.

Subtract the tax amount from the price buyers pay to find the price sellers receive. In the graph, this is the price level on the supply curve at the new equilibrium quantity.