Question

An excise tax on alcohol causes the supply of alcohol to decrease and the price of alcohol to decrease.

a. True
b. False

Answer 1

False

Step-by-step explanation:

An excise tax is tax levied on some specific goods. It is an indirect tax because it is not levied on customers.

Excise tax would increase the cost of supplying alcohol. This would reduce the supply of tax. A decrease in the supply of tax would increase the price of alcohol