When a Tax Is Levied on a Good

question 73

Multiple Choice

When a tax is levied on a good:

• A)the quantity of the good sold will change
• B)the price of the good sold will change
• C)both price and quantity of the good sold will change
• D)neither price nor quantity of the good sold will change

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Definitions:

Representativeness Heuristic

A cognitive bias in decision making, where the likelihood of an event is assessed based on how similar it is to a typical case.

Satisficing Heuristic

A decision-making process that seeks a satisfactory solution rather than an optimal one.

Decision-making Condition

Describes the environment or circumstances under which decisions are made, including factors like uncertainty, risk, clarity of information, and complexity.

Risk

The possibility of loss or injury, or the exposure to the chance of such uncertainties.