Use the Following to Answer Questions

question 174

Multiple Choice

Use the following to answer questions:
Figure: The Market for Lattes
-(Figure: The Market for Lattes) Look at the figure The Market for Lattes. If the government assesses a tax of $0.75 on each latte, the price the consumer pays for a latte after the tax will:

• A) increase from $2 to $2.75.
• B) increase from $2 to $2.50.
• C) increase from $2 to $2.25.
• D) change, but we cannot determine by how much.

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Definitions:

Latin Word

A term originating from Latin, a classical language that has contributed to many words in modern languages, especially in science, law, and medicine.

Knowledge

Facts, information, and skills acquired through experience or education; awareness or familiarity gained by experience of a fact or situation.

Risk Sharing

The practice of distributing potential risks among different parties to minimize the impact on any single participant.

Insurance

A contractual arrangement in which one party, the insurer, agrees to compensate another, the insured, for specific losses or damages in exchange for premiums.