If the Government Places a $2 Tax on Each Unit

question 205

Multiple Choice

If the government places a $2 tax on each unit of good X that is produced by Firm A, it follows that the tax will not affect __________ cost, but will affect __________ cost.

• A)variable; fixed
• B)marginal; variable
• C)average fixed; average variable
• D)marginal; fixed

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Definitions:

Advisory

Providing suggestions, recommendations, or guidance, often from a position of expertise.

Mandatory

Required by law or rules; obligatory, leaving no room for personal discretion or choice.

Massive Overstock

Describes a situation where a retailer or inventory-based business holds a significantly larger quantity of products than needed or demanded, leading to excess stock.

Safe Working Conditions

Standards and practices that ensure the physical and mental well-being of employees in their workplace.