The General Equilibrium Effects of an Excise Tax on a Commodity

question 31

Multiple Choice

The general equilibrium effects of an excise tax on a commodity which would then be used to fund improvements to our national parks:

• A)would probably raise the price of the commodity and raise the price of labor in the national park system.
• B)would probably lower the price of the commodity and raise the price of labor in the national park system.
• C)would probably raise the price of the commodity and raise the price of labor in the economy as a whole.
• D)would probably raise the price of the commodity and lower the price of labor in the economy as a whole.

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Definitions:

Value-Added

The enhancement a company gives its product or service before offering the product to customers.

Resource Mobilization

A theory in social movements indicating that the success of social movements depends on the resources available to them, including money, labor, and the organizational capacity to utilize them.

Relative Deprivation Theory

A theory proposing that individuals gauge their wealth or status in comparison to others, leading to feelings of deprivation.

Present Condition

The current state or situation of something, including all of its characteristics and circumstances at this moment.