Some Policymakers Have Argued That Products Like Cigarettes, Alcohol, and Sweetened

question 106

Multiple Choice

Some policymakers have argued that products like cigarettes, alcohol, and sweetened soda generate negative externalities in consumption.All else equal, if the government decided to impose a tax on soda, the equilibrium quantity of soda would ________ and the equilibrium price of soda would ________.

• A)increase; increase
• B)increase; decrease
• C)decrease; increase
• D)decrease; decrease

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Definitions:

Product F1

A specific product identified as F1, details of which would depend on the context in which it is referenced.

Direct Labor-Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service.

Activity-Based Costing

Activity-based costing is an accounting method that identifies and assigns costs to specific activities, facilitating more precise economic analysis of various business processes.

Activity Rates

Rates used in activity-based costing to assign costs to products or services based on the amount of an activity they consume.