Suppose There Is Currently a Tax of $50 Per Ticket

question 94

Multiple Choice

Suppose there is currently a tax of $50 per ticket on airline tickets.Buyers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $20 per ticket,then the

• A)demand curve will shift upward by $30,and the price paid by buyers will decrease by less than $30.
• B)demand curve will shift upward by $30,and the price paid by buyers will decrease by $30.
• C)supply curve will shift downward by $30,and the effective price received by sellers will increase by less than $30.
• D)supply curve will shift downward by $30,and the effective price received by sellers will increase by $30.

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Definitions:

Enforceable

A term applied to contracts or agreements that are legally binding and can be upheld in court.

Freedom Of Contract

The principle that individuals have the liberty to enter into contracts of their choosing without undue government restriction.

Courts

Institutions vested with the power to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters.

Public Policy

Principles and standards that guide government actions and decisions in order to serve the best interests of the general public or certain groups within it.