Question
6. After the government imposed a $0.20 per gallon tax on gasoline, the price of a gallon of gasoline increased from $1.00 to $1.15. Which
6. After the government imposed a $0.20 per gallon tax on gasoline, the price of a gallon of gasoline increased from $1.00 to $1.15. Which of the following statements is true?
A. Consumers bear the entire burden of the tax, since producers can pass the tax along to consumers.
B. Consumers and producers share the tax burden equally
. C. Consumers bear most, but not all, of the tax burden.
D. Producers bear the entire burden of the tax, since the tax was levied on producers, not consumers.
E. There is no tax burden, since gasoline is a normal good.
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