Which of the Following Quantities Decrease in Response to a Tax

question 1

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)It depends on whether the tax is levied on buyers or on sellers.

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Definitions:

Lion Capital

The top part of an Ashokan pillar, famously known as the national emblem of India, featuring four lions standing back to back.

Ashoka

was an ancient Indian emperor of the Maurya Dynasty, who ruled the Indian subcontinent from c. 268 to 232 BCE, known for his conversion to Buddhism and spreading Buddhist principles.

Upanishads

South Asian religious texts of ca. 800–500 BC that introduced the concepts of samsara, karma, and moksha.

Rebirths

Conceptual or spiritual renewals or transformations, often referring to ideas of reincarnation in religions or metaphorical new beginnings.