In a market with a downward-sloping demand curve and an upward-sloping supply curve, a law requiring sellers to pay the government a tax of $1.00 per pack on cigarettes has the effect of:
A. shifting the supply curve to the right and increasing the price buyers pay by $1.00.
B. shifting the demand curve to the right and increasing the price buyers pay by $1.00.
C. shifting the supply curve to the left and increasing the price buyers pay by less than $1.00.
D. shifting the demand curve to the left and increasing the price buyers pay by less than $1.00.
Answer: C
You might also like to view...
In 1990 the United States imposed trade embargoes on Iraq's international trade. The negative effect on Iraq's consumer surplus would be greater the
A) less elastic Iraq's demand schedule. B) more elastic Iraq's demand schedule. C) greater Iraq's dependence on foreign products. D) more inelastic Iraq's supply schedule. E) less elastic Iraq's labor force is.
The age-earnings profile predicts that earnings will peak at
A) the 35-40 age level. B) the 45-50 age level. C) the 60-65 age level. D) retirement.