The government imposes an excise tax on the sale of all college textbooks. Before the tax was
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Question:
The government imposes an excise tax on the sale of all college textbooks. Before the tax was imposed, 1 million textbooks were sold every year at a price of $70.After the tax is imposed, 800,000 books are sold yearly; students pay $90 per book, $60 of which publishers receive.
Question 1: The tax rate per textbook is,
A. 20
B. 30
C. 40
D. 10
Question 2: Given the after tax demand price, the tax incidence on students is
A. 20
B. 30
C. 40
D. 10
Question 3: Given the after-tax supply price, the tax incidence on publishers is
A. 20
B. 30
C. 40
D. 10
Question 4: The total tax revenue for the government is ______ million.
A. 3
B. 16
C. 24
D. 32
Question 5: The amount of deadweight loss due to the tax is ______ million.
A. 2
B. 3
C. 4
D. 6
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