The imposition of a new excise tax will
A. increase equilibrium price and decrease equilibrium quantity.
B. decrease equilibrium price and decrease equilibrium quantity.
C. increase equilibrium price and increase equilibrium quantity.
D. decrease equilibrium price and increase equilibrium quantity.
Answer: A
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Refer to Table 14-9. In order to maximize profit, the firm will produce a level of output where marginal cost is equal to
a. $6. b. $7. c. $8. d. $9.
Which of the following events would most likely reduce aggregate demand?
A. An increase in real interest rates. B. An increase in expected returns on investment. C. A reduction in business and personal tax rates. D. A reduction in the amount of existing capital stock.
When city beautification programs are funded privately: a. only contributing citizens are likely to benefit from a more beautiful city
b. only free riders are likely to benefit from a more beautiful city. c. an underallocation of resources toward the beautification project is likely to occur relative to what is socially efficient. d. none of the above
Each firm in a monopolistically competitive market faces a perfectly inelastic demand curve for its product
a. True b. False Indicate whether the statement is true or false