If an Excise Tax Is Imposed on Automobiles and Collected

question 238

Multiple Choice

If an excise tax is imposed on automobiles and collected from consumers:

• A) the demand curve will shift downward by the amount of the tax.
• B) the supply curve will shift upward by the amount of the tax.
• C) the equilibrium quantity supplied will increase relative to the pretax level.
• D) the equilibrium quantity demanded will increase relative to the pretax level.

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Definitions:

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