Use the Figure Below to Answer the Following Question(s)

question 206

Multiple Choice

Use the figure below to answer the following question(s) . Figure 4-8
Refer to Figure 4-8. The supply curve S₁ and the demand curve D indicate initial conditions in the market for soft coal. A $40-per-ton tax on soft coal is levied, shifting the supply curve from S₁ to S₂. Imposing the tax increases the equilibrium price of soft coal from

• A) $20 to $60 per ton.
• B) $20 to $50 per ton.
• C) $50 to $60 per ton.
• D) $50 to $90 per ton.

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Definitions:

Foreign Purchases

Transactions where consumers or businesses buy goods and services from another country, affecting the balance of trade.

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Price Level

A measure that reflects the average prices of goods and services in an economy at a given time.

Nominal GDP

The market value of all final goods and services produced in a country in a given period, measured in current prices.