Question

Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 15 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 10 billion bottles of wine are sold every year; consumers pay $9 per bottle, and producers receive $6 per bottle (after paying the tax). 

The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ burden that falls on producers is $ per bottle. 

True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on consumers. 

Answer 1

Amount of tax = 9-6= 3

Burden that falls on consumers = 9-7= 2

Burden that falls on producers = 7-6= 1

False

Answer 2

Amount of tax is 6 dollars, 

Burden that falls on consumers is 6,

Burden that fall on producers is 6,

False.

I know this because i got it wrong and they corrected my answer. Although my example was a little different.

(Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 15 million bottles of wine were sold every month at a price of $6 per bottle. After the tax, 9 million bottles of wine are sold every month; consumers pay $9 per bottle, and producers receive $3 per bottle (after paying the tax)).