If the Government Institutes a Specific Tax for a Good

question 48

Multiple Choice

If the government institutes a specific tax for a good,

• A)the producer simply passes the entire tax on to the consumer.
• B)the producer must absorb the entire tax.
• C)the producer can generally only pass part of the tax onto the consumer.
• D)the equilibrium price drops.

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Definitions:

Cognitive Processes

Mental activities involved in acquiring, storing, retrieving, and using information, including perception, memory, thinking, and language.

Encoding

The process of converting information into a form that can be stored in memory.

Encoding

The process of converting information into a form that allows it to be stored in our memory.

Cognitive Processes

Mental activities such as thinking, understanding, learning, and remembering.