Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 8 - Part III - Application: The Costs of Taxation - Quick Check Multiple Choice - Page 169: 4

Answer

A) increases by less than 50% and may even decline

Work Step by Step

When the government taxes a product, that cost transfers to the customer. The same amount of product could be sold, which would increase government tax revenue; or, more likely, less product could be sold, which would decrease tax revenue.
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