If Sanctions Are Imposed on Buyers but NOT on Sellers

question 120

Multiple Choice

If sanctions are imposed on buyers but NOT on sellers of an illegal good, then the equilibrium price _______ And the equilibrium quantity _______ .

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

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Definitions:

Marketable Securities

Short-term financial instruments that are easily convertible into cash, such as government bonds or certificates of deposit.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Lockbox Services

Banking services that speed up the collection of payments from customers by using a special post office box accessible by the bank.