In a Market with a Downward-Sloping Demand Curve and an Upward-Sloping

question 12

Multiple Choice

In a market with a downward-sloping demand curve and an upward-sloping supply curve, a law requiring sellers to pay the government a tax of $1.00 per pack on cigarettes has the effect of:

• A) shifting the supply curve to the right and increasing the price buyers pay by $1.00.
• B) shifting the demand curve to the right and increasing the price buyers pay by $1.00.
• C) shifting the supply curve to the left and increasing the price buyers pay by less than $1.00.
• D) shifting the demand curve to the left and increasing the price buyers pay by less than $1.00.

---

Definitions:

Hula Hoops

A popular toy consisting of a large plastic ring that is twirled around the waist, limbs, or neck for recreational activity or exercise.

Supply Curve

A graphical representation showing the relationship between the quantity of goods supplied by producers and the price of those goods.

Gardenburgers

This is a brand name for a type of vegetarian burger made from different kinds of grains and vegetables, aiming to simulate the taste and texture of meat burgers.

Supply Curve

A visual diagram that illustrates the connection between a product's price and the amount of the product that sellers are prepared to offer.