The government imposes a unit excise tax on bubble gum. What happens as a result?
A) The equilibrium quantity of bubble gum increases.
B) At the original market price, there will be a bubble gum surplus so price decreases.
C) At the original market price, there is a bubble gum shortage and so price rises.
D) There will be no change in either the market price or equilibrium quantity as long as the excise tax rate is 5 percent or less.
C
You might also like to view...
When a country adds more capital to its existing stock:
A. the additional productivity is less than the previous increases to productivity. B. the additional productivity is more than the previous increases to productivity. C. it experiences rapidly increasing rates of growth. D. it experiences rapid declines in its level of income.
Price discrimination leads to higher prices for all consumers.
Answer the following statement true (T) or false (F)
Wages for high-skilled labor have risen more than wages for low-skilled labor even though more people are highly skilled college graduates than ever before. Which of the following explains this?
a. The demand for high-skilled labor has risen alongside the number of college graduates. b. The demand for low-skilled labor has risen while the demand for high-skilled labor remains the same. c. The value of both high-skilled labor and low-skilled labor has risen, but demand for both remains the same. d. The value of low-skilled labor has risen alongside the number of high school graduates.
If a goldsmith has 200 gold coins in his safe and there are 400 receipts in circulation, how much is his reserve ratio?
Fill in the blank(s) with the appropriate word(s).