Consider the Market Shown in the Graph

question 128

Multiple Choice

Consider the market shown in the graph. What would most likely be the cause of a shift from S1 to S2?

• A) A tax on sellers
• B) A tax on buyers
• C) A subsidy for sellers
• D) A subsidy for buyers

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Definitions:

Cappuccino

A popular coffee drink made with equal parts espresso, steamed milk, and frothed milk.

Optimal Consumption Bundle

The combination of goods and services that maximizes a consumer's utility, given their budget constraint and the prices of goods and services.

Utility

A measure of satisfaction, usefulness, or pleasure obtained from consuming goods and services.

Cappuccino

A beverage consisting of espresso, warm milk, and a layer of frothy milk on top.