When a Tax Is Levied on the Sale of an Item

question 90

Multiple Choice

When a tax is levied on the sale of an item,

• A) consumers will generally buy more of it.
• B) producers will generally supply more of it.
• C) the price (including the tax) of the product will generally decline.
• D) less of the item will generally be bought and sold.

---

Definitions:

Government Takeover

A situation in which a government assumes control over a private company, sector, or the entire economy.

Gulf of Mexico Oil Spill

An environmental disaster involving the large-scale release of oil into the Gulf of Mexico, notably the Deepwater Horizon spill in 2010.

Deregulation

Legislation during the Reagan-Clinton era that removed regulations on many industries, including finance and air travel.

Unilateral Force

The use of military power by one country, without the support or cooperation of other nations, to achieve its national interests or objectives.