90. If the supply of a product is perfectly elastic and demand is downsloping, an excise tax of $2 per unit will increase price by:A. more than $2.B. less than $2.C. $2 and increase equilibrium output.D. $2 and reduce equilibrium output.Answer: DTopic: Tax incidence and efficiency lossLearning Objective: 19-03: Explain the principles relating to tax shifting, tax incidence, and the efficiency losses caused by taxes.Difficulty: 3 HardBloom’s: Level 4 Analyze AACSB: Reflective Thinking[Question] 91. Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of demand for X is unitary (coefficient = 1). If the incidence of the tax is such that the producers of X pay $1.75 of the tax and the consumers pay $.25, we can conclude that the:

[Question] 92. Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of demand for X is unitary (coefficient = 1). If the incidence of the tax is such that consumers pay $1.80 of the tax and the producers pay $.20, we can conclude that the:[Question] 93. Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of supply of X is unitary (coefficient = 1). If the incidence of the tax is such that the producers of X pay $1.90 of the tax and the consumers pay $.10, we can conclude that the:[Question]

Chapter 019 Public Finance: Expenditures and Taxes