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.

---

Definitions:

Limbs

Refers to the arms and legs.

Simultaneous

Occurring at the same time.

Anterior Axillary Line

An imaginary line drawn along the body from the armpit (anterior axilla) down through the point at which the arm joins the body.

Echoes

Reflections of sound.