Suppose Sellers of Liquor Are Required to Send $1

question 51

Multiple Choice

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

• A)This tax causes the demand curve for liquor to shift downward by $0.80 at each quantity of liquor.
• B)The incidence of the tax is summarized by the fact that sellers send the tax payments to the government.
• C)Eighty percent of the burden of the tax falls on buyers.
• D)All of the above are correct.

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Definitions:

Spontaneous Recovery

After a pause in exposure to the conditioned stimulus, a once suppressed conditioned response emerges again.

Higher-Order Conditioning

A process in classical conditioning by which a stimulus that was previously neutral becomes conditioned by being paired with another conditioned stimulus.

Extinction

In behavioral psychology, the gradual weakening and eventual disappearance of a conditioned response.

Stimulus Generalization

The psychological phenomenon where a response to a specific stimulus becomes triggered by stimuli that are similar in nature.