Table of contents

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1. Introduction to Macroeconomics1h 57m
2. Introductory Economic Models59m
3. Supply and Demand3h 43m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
6. Introduction to Taxes1h 25m
7. Externalities1h 3m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. Introducing Economic Concepts49m
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
12. Unemployment and Inflation1h 15m
13. Productivity and Economic Growth1h 17m
14. The Financial System1h 37m
15. Income and Consumption52m
16. Deriving the Aggregate Expenditures Model1h 22m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy1h 0m
21. Revisiting Inflation, Unemployment, and Policy46m
22. Balance of Payments30m
23. Exchange Rates1h 16m
24. Macroeconomic Schools of Thought40m
25. Dynamic AD/AS Model35m
26. Special Topics11m

6. Introduction to Taxes

Introducing Taxes and Tax Incidence

Macroeconomics

6. Introduction to Taxes

Introducing Taxes and Tax Incidence

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Multiple Choice

If a tax is levied on the sellers of a product, the demand curve:

Shifts to the left in an amount equal to the tax

Shifts to the right in an amount equal to the tax

Does not change

Is inelastic

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Verified step by step guidance

Understand the concept of tax incidence: When a tax is levied on sellers, it affects the supply side of the market rather than the demand side.

Recall that the demand curve represents the relationship between the price of a good and the quantity demanded by consumers. It is not directly affected by taxes on sellers.

Recognize that a tax on sellers increases the cost of supplying the product, which typically results in a leftward shift of the supply curve, not the demand curve.

Since the demand curve is determined by consumer preferences and income, it remains unchanged when a tax is imposed on sellers.

Conclude that the correct answer is that the demand curve does not change when a tax is levied on sellers, as the tax affects the supply side.