Exhibit 1 -Refer to Exhibit 1. as We Move from Point a Move

question 29

Multiple Choice

Exhibit 1

-Refer to Exhibit 1. As we move from point A to point D,

• A) the opportunity cost of buns in terms of biscuits falls.
• B) the opportunity cost of buns in terms of biscuits rises.
• C) the opportunity cost of buns in terms of biscuits is constant.
• D) the economy becomes less efficient.
• E) the economy becomes more efficient.

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Definitions:

Excise Tax

A tax on specific goods or services, often with the goal of discouraging their use or generating revenue.

Supply Curve

A graphical representation of the relationship between the price of a good and the amount of it suppliers are willing to offer for sale, holding other factors constant.

Tax System

The organized way in which a government levies taxes on its citizens and companies to generate revenue.

Marginal Incentives

Additional rewards or penalties that influence the benefits or costs of engaging in one more unit of an action.