Has your clicker response been recorded properly in the last 2 classes? 1.Yes, no problems. 2.I had problems earlier, but now its fine. 3.I am still having problems. 4.I haven’t checked.

The effect on price of a sales tax collected from buyers is the same as the effect of 1.An upward shift of the demand curve. 2.A downward shift of the demand curve. 3.An upward shift of the supply curve. 4.A downward shift of the supply curve.

The demand curve has slope –1 and the supply curve has slope +2. A sales tax causes the after tax price to buyers to rise by $10. The after tax price received by sellers must have fallen 1.By $10 2.By $5 3.By $20 4.By $0

And on to our lecture…

If the supply curve is vertical, the excess burden of a sales tax is 1.Zero 2.The quantity sold times the tax rate. 3.Less than half the tax revenue. 4.More than half the tax revenue.

If the supply curve is horizontal, a $10 increase in the sales tax will cause the equilibrium after tax price to rise by 1.By $10. 2.By less than $10. 3.By more than $10.

And back to our lecture…