If a Pigovian Tax Is Levied on Consumers, the Demand

question 33

Multiple Choice

If a Pigovian tax is levied on consumers, the demand curve will shift straight _______ and the equilibrium quantity will _______.

• A)up; decrease
• B)down; decrease
• C)down; increase
• D)up; increase

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Definitions:

Simplify

To make something less complex or complicated, making it easier to understand or solve.

Radical

Refers to the root of a number, with the most common being the square root, though it can refer to cube roots or higher.

Square Root

A number which produces a specified quantity when multiplied by itself.

Square Root

The figure that, upon being multiplied with itself, results in the starting number.