Figure 4-22 Refer to Figure 4-22. Suppose the Same S and D

question 95

Multiple Choice

Figure 4-22
Refer to Figure 4-22. Suppose the same S and D curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. Now,

• A) the burden on buyers will be larger than in the case illustrated in Figure 4-22.
• B) the burden on sellers will be smaller than in the case illustrated in Figure 4-22.
• C) a downward shift of the demand curve replaces the upward shift of the supply curve.
• D) All of the above are correct.

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Definitions:

Mere Exposure Effect

A psychological phenomenon by which people tend to develop a preference for things merely because they are familiar with them.

Self-Fulfilling Prophecy

A prediction that directly or indirectly causes itself to become true, due to positive feedback between belief and behavior.

Familiar Brand Name

A brand name that is well known among consumers, often because of extensive marketing or long-term presence in the market.

Mere Exposure Effect

A psychological phenomenon whereby people tend to develop a preference for things merely because they are familiar with them.