Figure 4-10 -Refer to Figure 4-10.Suppose the Market Is Initially in Equilibrium

question 153

Multiple Choice

Figure 4-10

-Refer to Figure 4-10.Suppose the market is initially in equilibrium at price P₁ and then the government imposes a tax on every unit sold.Which of the following statements best describes the impact of the tax?

• A)The consumer will bear a smaller share of the tax burden if the demand curve is D₁.
• B)The consumer's share of the tax burden is the same whether the demand curve is D₁ or D₂.
• C)The consumer will bear a smaller share of the tax burden if the demand curve is D₂.
• D)The consumer will bear the entire burden of the tax if the demand curve is D₂ and the producer will bear the entire burden of the tax if the demand curve is D₁.

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Definitions:

Hatshepsut

The fifth pharaoh of the Eighteenth Dynasty of Egypt, notable for being one of the few female rulers and for her wealth and building projects.

Portrait

An artistic representation of a person in which the face and its expression is predominant, intended to display the likeness, personality, and even the mood of the person.

Nefertiti

An ancient Egyptian queen, known for her beauty and as the royal consort of Pharaoh Akhenaten; her iconic bust is one of the most famous pieces of Egyptian art.

Hatshepsut

One of the few female pharaohs of ancient Egypt, who reigned successfully in the early 15th century BCE and expanded Egypt's trade and building projects.