If Buyers of Illegal Goods Are Punished but Sellers Are

question 52

Multiple Choice

If buyers of illegal goods are punished but sellers are not, then the price _______ and the equilibrium quantity _______.

• A) falls; increases
• B) rises; decreases
• C) rises; increases
• D) falls; decreases

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Definitions:

Accounting Equation

A basic principle of accounting that represents the relationship between an entity's assets, liabilities, and owners' equity (Assets = Liabilities + Owners' Equity).

Accounts Payable

Obligations a company owes to its suppliers or creditors for goods and services received but not yet paid for.

Cash

Liquid currency and coins that are accepted as a medium of exchange for goods and services.

Risk

The possibility of experiencing loss or damage as a result of making a particular decision or taking a certain action.