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

question 72

Multiple Choice

Figure 4-10

-Refer to Figure 4-10.Suppose the market is initially in equilibrium at price P₀ 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 D₀.
• B) The consumer's share of the tax burden is the same whether the demand curve is D₀ or D₁.
• C) The consumer will bear a smaller share of the tax burden if the demand curve is D₁.
• D) The consumer will bear the entire burden of the tax if the demand curve is D₁ and the producer will bear the entire burden of the tax if the demand curve is D₀.

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Definitions:

Constitutes Offense

Defines or establishes the act or actions considered to be a violation of law or rules.

Modified Comparative Negligence

In some states, a defense whereby the defendant is not liable for the percentage of harm that he or she proves can be attributed to the plaintiff's own negligence if the plaintiff's negligence is responsible for less than 50 percent of the harm. If the defendant establishes that the plaintiff's negligence caused more than 50 percent of the harm, the defendant has no liability.

Fault Percentage

The degree of responsibility, expressed as a percentage, attributed to each party in a legal dispute.

50% At Fault

A principle in some legal systems where, if both parties involved in an accident are equally responsible, each must bear half the liability and damages.