Which of the following statements about excise taxes is TRUE?
A. The equilibrium price will increase and the equilibrium quantity will remain unchanged.
B. Consumers will refuse to pay excise taxes forcing the producers to pay it.
C. Both the consumer and producer pay part of the excise tax.
D. The producer will increase the price of the good by the amount of the excise tax.
Answer: C
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Kendra’s country is known for its fruit products, but before the fresh fruit can be made into candies, jams, and juices, a lot is lost due to pests, weather, and damage during shipping. Recently, however, researchers discovered a better way to transport the fruit that cut down on waste by 11 percent. This is an example of ______
a. an increase in productivity b. a rise in the standard of living c. sustained economic growth d. diminishing marginal returns
If the Fed were to impose a slight increase in the required reserves ratio, there would be _____.
(A) No change in the money supply. (B) An increase, then a decrease, in the money supply. (C) An increase in the money supply. (D) A decrease in the money supply.
In economics, we observe that people consistently make irrational decisions in certain situations and choose to do something even if:
A. the benefits outweigh the sunk costs. B. the benefits outweigh the opportunity costs. C. the opportunity costs outweigh the benefits. D. the sunk costs outweigh the opportunity costs.
The analysis of a progressive tax is very similar to that of a proportional tax.
A. True B. False C. Uncertain