A tax imposed on the buyers of a good will
a. raise both the price buyers pay and the effective price sellers receive.
b. raise the price buyers pay and lower the effective price sellers receive.
c. lower the price buyers pay and raise the effective price sellers receive.
d. lower both the price buyers pay and the effective price sellers receive.
b
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Refer to Figure 10-1. When the price of hoagies increases from $5.00 to $5.75, quantity demanded decreases from Q1 to Q0. This change in quantity demanded is due to
A) the fact that marginal willingness to pay falls. B) the law of diminishing marginal utility. C) the income and substitution effects. D) the price and output effects.
Many tax-funded programs are intended to:
A. decrease surplus. B. increase income inequality. C. provide basic human needs. D. fail due to underfunding.