In What Way Is the Result of an Excise Tax

question 18

Multiple Choice

In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price floor?

• A) The amount that consumers pay for the good will be less than they previously paid
• B) The amount of the good that will be traded in the market will be greater than previously traded
• C) both price floors and excise taxes create excess demand
• D) The amount that consumers pay for the good will be greater than they previously paid
• E) Both price floors and excise taxes create excess supply

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Definitions:

Chunking Effect

A cognitive process that enhances memory by breaking information down into smaller, manageable units or chunks.

Primacy Effect

The tendency to remember information at the beginning of a list better than information that comes later.

Serial Position Effect

A cognitive phenomenon whereby items at the beginning and end of a list are more easily remembered than those in the middle.

Encoding Specificity Effect

The principle stating that the recall of information is higher if the cues present at the time of encoding are also present at the time of retrieval.