Before Proposing That the State's Sales Tax Be Expanded to Include

question 141

Multiple Choice

Before proposing that the state's sales tax be expanded to include food, a legislator should ask whether:

• A) the state tax agency will allow this expansion.
• B) a majority of his constituents agree.
• C) grocery stores will be able to collect the tax.
• D) the state's constitution allows for this tax.

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied is equal to the quantity of goods demanded, resulting in no surplus or shortage.

Supply Increases

A condition in which the quantity of goods and services offered by businesses rises, often leading to lower prices if demand remains constant.

Demand Decreases

Occurs when consumers are less willing or able to purchase a product at any given price, leading to a leftward shift in the demand curve.

Shift Left

A decrease in the supply or demand of a product in a market diagram, typically resulting in a lower equilibrium quantity and potentially a higher or lower equilibrium price.