When a Tax Is Levied on Buyers of a Good

question 98

Multiple Choice

When a tax is levied on buyers of a good,

• A)government collects too little revenue to justify the tax if the equilibrium quantity of the good decreases as a result of the tax.
• B)there is an increase in the quantity of the good supplied.
• C)a wedge is placed between the price buyers pay and the price sellers effectively receive.
• D)the effective price to buyers decreases because the demand curve shifts leftward.

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Definitions:

Mistake Of Law

An error made by a person in understanding the law as it pertains to their actions or a situation.

Reasonable Reliance

The dependence by one party on the representations or promises of another where such reliance is logically or legally justifiable.

Material Fact

Information that is significant enough to influence a decision, especially pertinent in contract and disclosure laws.

Utah Law

Law specific to the state of Utah, governed by state legislation and legal precedents within Utah jurisdiction.