A specific tax
A)increases supply by shifting the curve up.
B)is a tax that is paid only by producers.
C)is a per-unit tax on a good.
D)is a percentage tax on the total value of sales.
E)is proportionate to the total value of a good sold.

Question

Quizplus · Accepted Answer

A specific tax is a per-unit tax on a good, meaning that a fixed amount of tax is charged for each unit of the good sold. This can lead to an increase in the price of the good, which can decrease demand and potentially shift the supply curve. However, the tax itself is not proportional to the total value of sales, so options D and E are incorrect. Option B is also incorrect, as a specific tax can be paid by either producers or consumers, depending on the market conditions.

A Specific Tax