Which of the following is most subject to the lemons problem?

Refer to Scenario 8.2. The result of the tax in the long run will be that

A) Q falls from 30,000; P rises by less than $20,000. B) Q falls from 30,000; P rises by $20,000. C) Q falls from 30,000; P does not change. D) Q stays at 30,000; P rises by $20,000. E) Q stays at 30,000; P rises by less than $20,000.

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.