If the Same Fine Is Imposed on Buyers and Sellers

question 93

Multiple Choice

If the same fine is imposed on buyers and sellers of an illegal good so that the cost of breaking the law is the same for both, then

• A) there is more government revenue collected than with an excise tax on the good.
• B) there is no deadweight loss in this market because the extra producer surplus will exactly offset the lost consumer surplus.
• C) the supply and demand curves both shift leftward by equal amounts.
• D) the equilibrium price of the good definitely increases.

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Definitions:

Interdependence

A mutual reliance between two or more groups, organisms, or objects, where each affects or depends on the others.

Familiarity Effect

The tendency of people to feel more positive toward a person, item, product, or other stimulus the more familiar they are with it.

Positive Toward

Positive toward is not a recognized psychological or scientific term and may be a typographical error or miscommunication. NO.

Stereotypes

Oversimplified and widely held beliefs about the characteristics, attributes, and behaviors of a particular group of people.