suppose that in canada the government places a $1,500 tax on the buyers of new snowmobiles. after the…

suppose that in canada the government places a $1,500 tax on the buyers of new snowmobiles. after the purchase of a new snowmobile, a buyer must pay the government $1,500. how would the imposition of the tax on buyers be illustrated in a graph?\na. the tax will shift both the demand and supply curves down by $1,500.\nb. the tax will shift the demand curve down by $1,500.\nc. the tax will shift the supply curve up by $1,500.\nd. the tax will shift the demand curve up by $1,500.

suppose that in canada the government places a $1,500 tax on the buyers of new snowmobiles. after the purchase of a new snowmobile, a buyer must pay the government $1,500. how would the imposition of the tax on buyers be illustrated in a graph?\na. the tax will shift both the demand and supply curves down by $1,500.\nb. the tax will shift the demand curve down by $1,500.\nc. the tax will shift the supply curve up by $1,500.\nd. the tax will shift the demand curve up by $1,500.

Answer

Brief Explanations:

When a tax is imposed on buyers, it effectively increases the price they have to pay for the good. This reduces the quantity demanded at each price level. As a result, the demand curve shifts downwards by the amount of the tax. The supply - side is not directly affected by a tax on buyers. So, the demand curve shifts down by the amount of the $1,500 tax.

Answer:

B. The tax will shift the demand curve down by $1,500.