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Suppose that the gasoline tax is increased by a large amountsay by $1 per gallon.What will happen in the gasoline market? (Hint: the gasoline tax
Suppose that the gasoline tax is increased by a large amountsay by $1 per gallon.What will happen in the gasoline market? (Hint: the gasoline tax is paid by gasoline sellers to the government; it is a cost of production.)
a) The demand curve for gasoline will shift up (and right)
b) The demand curve for gasoline will shift down (and left)
c) The supply curve of gasoline will shift right (and down)
d) The supply curve for gasoline will shift left (and up)
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