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:

Actuated

Refers to a mechanism or device being put into action or moved by a control signal, often used in machinery and automatic processes.

Pneumatically

Referring to the use of air pressure or compressed air to power tools, machines, or systems.

Combination Wrench

A wrench with an open end on one side and box end on the other, both of the same nominal dimension.

Open-End Jaws

A feature in tools, such as wrenches, designed to grip onto nuts or bolts from the side, enabling usability in tight spaces.