Which of the Following Quantities Decrease in Response to a Tax

question 96

Multiple Choice

Which of the following quantities decrease in response to a tax on a good?

• A)the equilibrium quantity in the market for the good,the effective price of the good paid by buyers,and consumer surplus
• B)the equilibrium quantity in the market for the good,producer surplus,and the well-being of buyers of the good
• C)the effective price received by sellers of the good,the wedge between the effective price paid by buyers and the effective price received by sellers,and consumer surplus
• D)None of the above is necessarily correct unless we know whether the tax is levied on buyers or on sellers.

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Definitions:

Vacating Employees

Refers to the process of employees leaving their current positions, either voluntarily or involuntarily.

Due Diligence

A comprehensive appraisal undertaken by a prospective buyer, especially of a business, to establish its assets and liabilities and evaluate its commercial potential.

Potential Acquirer

An individual or organization with the capability and interest to purchase or take over another company.

Compensation System

A structured plan designed to provide employees with various forms of reward in return for their labor, including salary, wages, bonuses, and benefits.