Suppose, for example, that the government levies a $1 per-unit tax on a gallon of gasoline. This has the
effect of shifting the supply curve up by the amount of the tax. This upward parallel shift results in a
decline in supply. In a similar fashion, a reduction in a per-unit excise tax results in a downward parallel
shift of the supply, which results in an increase in supply.
32. Review table 2.2. Know how the direction of the change in the determinant affects the direction of the
shift in the supply curve. Know that increases in the supply are shifts to the right, and decreases in
supply are shifts to the left.