Which of the Following Is a Correct Statement About Markets

question 146

Multiple Choice

Which of the following is a correct statement about markets for prohibited goods?

• A) Penalising either buyers or sellers of an illegal good decreases the quantity bought.
• B) Penalising sellers of an illegal good decreases supply and penalising buyers decreases demand.
• C) Taxing a good at a sufficiently high rate can achieve the same consumption level as prohibition.
• D) All of the above are correct statements.

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Definitions:

Sympathy

Feelings of pity or sorrow for someone else's misfortune, often leading to supportive or compassionate actions.

Belief in a Just World

The cognitive bias that assumes people get what they deserve, leading to a rationale for misfortune and suffering.

Empathy-Altruism Model

The idea that the reason people help others depends on how much they empathize with them. When empathy is low, people help others when benefits outweigh costs; when empathy is high, people help others even at costs to themselves.

Empathy Gap

The difficulty in understanding or predicting the preferences, behaviors, or feelings of those who are in a different emotional or physical state.