The Graph Shown Demonstrates a Tax on Buyers

question 112

Multiple Choice

The graph shown demonstrates a tax on buyers. After the tax is in place, buyers purchase _______ units, and the post-tax price paid for each one is _______.

• A) 6; $22
• B) 6; $34
• C) 9; $18
• D) 9; $30

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Definitions:

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, reflecting their preferences for combinations of goods.

Utility

A measure of satisfaction or benefit that consumers receive from consuming goods and services.

Equilibrium Position

The state in which market supply and demand balance each other, resulting in stable prices and quantities.

Budget Line

A graphical representation showing all possible combinations of two goods that can be purchased with a given income.