What Will a Tax Placed on the Seller of a Product

question 163

Multiple Choice

What will a tax placed on the seller of a product do to the equilibrium price and quantity

• A)It will raise equilibrium price and lower equilibrium quantity.
• B)It will raise both equilibrium price and quantity.
• C)It will lower equilibrium price and raise equilibrium quantity.
• D)It will lower both equilibrium price and quantity.

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Definitions:

Dictator Game

An experimental game in economics where one player, the "dictator," determines how to split a sum of money with another player.

Behavioral Economics

An area of economics that examines the influence of psychological, cognitive, emotional, cultural, and social aspects on economic decision-making.

Net Change

The difference between the closing value of a financial instrument on a given day and its closing value on the preceding day.

Stock Market

A collection of markets and exchanges where the buying, selling, and issuance of shares of publicly-held companies take place.