Suppose an Excise Tax of $0

question 117

Multiple Choice

Suppose an excise tax of $0.75 is imposed on every pack of cigarettes sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

• A)The supply curve for cigarettes would shift to the left by $0.75.
• B)The supply curve for cigarettes would shift to the left by less than $0.75.
• C)The supply curve for cigarettes would shift to the left by more than $0.75.
• D)The supply curve for cigarettes would shift to the right by $0.75.

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Definitions:

Heuristic Processing

A method of decision-making or reasoning based on simplified strategies or 'rules of thumb', rather than systematic analysis.

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Unconscious

The part of the mind that is inaccessible to the conscious mind but affects behavior and emotions.