In graphical form,the effect of imposing a tax on a good is shown as
A) a leftward shift of the market supply curve.
B) a rightward shift of the market supply curve.
C) a downward movement along the market supply curve.
D) no change to the market supply curve.
Answer: A
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Recall the Application. Recessions can occur either when there is a(n) ________ in aggregate demand or a(n) ________ in aggregate supply
A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
What is adverse selection?
A) It refers to the situation in which one party to a transaction takes advantage of knowing more than the other party to the transaction. B) It refers to the actions people take after they have entered into a transaction that make the other party to the transaction worse off. C) It refers to the private, self-interested actions people that people pursue, which when taken collectively leads to a loss in economic surplus. D) It refers to the actions people take before they enter into a transaction so as to mislead the other party to the transaction.