Final answer:
The levying of a per-unit tax on auto tires is expected to decrease the supply of auto tires, as it increases manufacturing costs and results in higher prices. This situation was observed when a tariff on imported Chinese tires led to price hikes and had broader economic and political ramifications.
Step-by-step explanation:
The levying of a per-unit tax on each auto tire sold is likely to decrease the supply of auto tires. A per-unit tax on tires means additional costs for manufacturers and sellers, leading to a higher price for consumers. Based on a real-world example, when a tariff was enacted on tires imported from China in September 2009, the price of tires in the United States increased significantly, which is usually indicative of a reduction in the supply curve. The increased cost of production due to a tax may lead companies to supply fewer tires at any given price point, or it could mean higher prices for the same quantity of tires to cover the additional tax expenses.
Despite the potentially significant impact on price and supply, the U.S. tire tariff was not met with substantial public outcry, suggesting that the public might not prioritize or even notice such policy changes despite their effect on prices. This situation is complex because it involves considerations of globalization and protectionism, economic decisions by the government, impacts on domestic industries, and the broader socio-political context. In essence, the application of a tax or tariff affects both the microeconomic supply dynamics and the broader economic and political landscape.