What Does a Tax Placed on a Good Do

question 12

Multiple Choice

What does a tax placed on a good do

• A)It causes the price of the good to fall.
• B)It affects buyers of the good, but not sellers.
• C)It causes the size of the market for the good to shrink.
• D)It affects sellers of the good, but not buyers.

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Definitions:

Specialization

Specialization refers to the process of focusing effort and resources on the production of a particular product or a limited scope of products, leading to increased efficiency.

Specialization and Trade

The economic strategy where individuals or nations focus on producing specific goods or services and exchange them, increasing efficiency and wealth.

Jack-of-all-trades

An individual skilled in many different areas, capable of performing competently in a variety of tasks or professions.

Net Exports

The difference between a country's total value of exports and total value of imports. If exports exceed imports, net exports are positive; if imports exceed exports, net exports are negative.