If the Government Levies a $1 Excise Tax on Each

question 107

Multiple Choice

If the government levies a $1 excise tax on each unit of a good sold, what will happen to the producer's cost curve?

• A) The average total cost and marginal cost curves will shift downward by the amount of the tax.
• B) The average total cost and marginal cost curves will shift upward by the amount of the tax.
• C) The marginal cost curve will shift upward by the amount of the tax; the average total cost curve will remain unchanged.
• D) Both the marginal cost and average total costs will remain the same since taxes are not a cost of production.

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Definitions:

Innermost Conflicts

Deep-seated struggles or disagreements within oneself, often involving emotions or desires.

Resistance

The refusal to accept or comply with something; the attempt to prevent something by action or argument.

Word Association

is a psychological method where individuals spontaneously say or write the first word that comes to mind in response to a given word.

Neuroses

A term often used historically to describe a range of psychological disorders characterized by anxiety, depression, or other feelings of distress but not by delusions or hallucinations.