What Would Happen to the Equilibrium Price and Quantity for the Market

question 56

Multiple Choice

What would happen to the equilibrium price and quantity for the market for cigarettes if the government increased the tax and a scientific study came out confirming that smoking cigarettes increased the rate of heart disease?

• A) Equilibrium price will be indeterminate and equilibrium quantity will go down.
• B) Equilibrium price will go up and equilibrium quantity will go up.
• C) Equilibrium price will go down and equilibrium quantity will be indeterminate.
• D) Equilibrium price will be indeterminate and equilibrium quantity will go up.
• E) Equilibrium price will go up and equilibrium quantity will be indeterminate.

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Definitions:

Experimental Group

The group in a scientific experiment that receives the treatment or intervention being tested.

Music

An art form and cultural activity involving the creation of works through the organization of sound, rhythm, melody, and harmony.

Productivity

The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.

Experimental Group

The group in an experiment that receives the treatment or intervention under study, allowing researchers to measure its effects.