Exhibit 19-2 ​

Multiple Choice

Exhibit 19-2
​

-Refer to Exhibit 19-2. The market for good X is initially in equilibrium at $5. The government then places a per-unit tax on good X, as shown by the shift of S₁ to S₂. As a result,

A) consumers end up paying $6.25 per unit, and producers end up receiving $5.00 per unit, but keeping only $4.00 per unit.
B) consumers end up paying $6.25 per unit, and producers end up receiving and keeping $4.00 per unit.
C) consumers end up paying $5.00 per unit, and producers end up receiving and keeping $5.00 per unit.
D) consumers end up paying $6.25 per unit, and producers end up receiving $6.25 per unit, but keeping only $4.00 per unit.
E) none of the above