If a tax is imposed on a good,________
A) consumer surplus increases
B) producer surplus increases
C) the quantity of the good traded in the market increases
D) the equilibrium quantity of the good in the market falls
D
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Government certification of the weights and measures used in business can be justified because
A) no business operated for profit would have any interest in weighing and measuring accurately. B) people cannot be trusted. C) government officials, unlike private parties selling for profit, have no incentive to cheat. D) it reduces total transaction costs below what they would be if all individual buyers or sellers had to check for themselves.
Given the budget line in the above figure, which of the following combinations of pizza and milk are affordable?
A) 0 pizzas, 12 gallons of milk B) 2 pizzas, 2 gallons of milk C) 4 pizzas, 4 gallons of milk D) All of the above combinations are affordable.