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SCENARIO 1: The current lowest cost method of producing brown paper bags is $5.00 per 100 bags. The government imposes a $0.50 tax per unit
SCENARIO 1: The current lowest cost method of producing brown paper bags is $5.00 per 100 bags. The government imposes a $0.50 tax per unit of labor. After the tax is imposed, paper bag producers will use two units of labor to produce 100 paper bags. This increases the cost of paperbag production to $6.50 per 100 bags. 12) Refer to Scenario 1. If 1,000 paper bags are sold, the total burden of the tax is A) 51.50. B) $10.00. C) $15.00. D) $65.00. 13) Refer to Scenario 1. If 1,000 paper bags are sold, the excess burden of the tax is A) 55.00. B) $10.00. C) $15.00
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