Taxes that create an excess burden are bad.

In the above figure, income is $8, the price of a soft drink is $1, and the initial price of a milkshake is $2. If the price of a milkshake decreases to $1, the income effect is the movement from point ________ to point ________

A) a; b B) b; d C) b; c D) a; c

Which of the following is not a reason to restrict trade?

A. Concerns about dumping. B. Concern about high prices for consumers. C. Protection of infant industries. D. Preservation of national security.