-Suppose the Government Has Declared Beer to Be an Illegal

question 40

Multiple Choice

-Suppose the government has declared beer to be an illegal substance and has imposed equal penalties on any person caught buying a beer and on any person caught selling a beer. Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect?

• A) $5 per quart and 300 quarts of beer
• B) $3 per quart and 500 quarts of beer
• C) $3 per quart and 100 quarts of beer
• D) $1 per quart and 300 quarts of beer

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Red Flag

A warning signal indicating potential problems or dangers.

Liability

A legal responsibility or obligation, often associated with a claim against someone in a court of law.

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A plant product cultivated primarily for its leaves, which are dried and fermented before being used in smoking products, snuffs, chew, and for cigars.

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A broad group of diseases characterized by uncontrolled cell growth that can lead to tumors and spread to other parts of the body.