With a Downward Sloping Demand Curve and an Upward Sloping

question 171

Multiple Choice

With a downward sloping demand curve and an upward sloping supply curve for a product, placing an excise tax on this product will:

• A)increase equilibrium price and quantity.
• B)decrease equilibrium price and quantity.
• C)decrease equilibrium price and increase equilibrium quantity.
• D)increase equilibrium price and decrease equilibrium quantity.

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Definitions:

Type II Error

The error that occurs when a false null hypothesis is not rejected, also known as a "false negative" finding.

Population Mean

The average value of a property of the members of a population, which is a comprehensive collection of individuals or objects studied.

Null Hypothesis

A statement used in statistical testing that proposes there is no significant effect or difference, and any observed variation is due to chance.

Power of a Test

The power of a test refers to the probability that the test correctly rejects a false null hypothesis, essentially measuring the test's ability to detect an effect or difference when there is one.