A Consumer Derives Utility for "All Other Goods," G,and Cigarettes,s

question 35

Multiple Choice

A consumer derives utility for "all other goods," g,and cigarettes,s.The price of "all other goods" equals $9 and the price of cigarettes is $10.Now suppose the government implements a $0.50 per-unit tax on cigarettes to encourage a decrease in smoking.How does the tax affect the marginal rate of transformation,MRT?

• A) The MRT will decrease to - .
• B) The MRT will increase to - .
• C) The MRT will increase to - + 0.05.
• D) The MRT will decrease to - - 0.05.

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Definitions:

Better Paid

Describes a position or job that offers a higher salary compared to others, often reflecting skill level, experience, or demand.

Foreign Workers

Employees from other countries working in a nation different from their homeland, often to fill labor shortages.

Tariff

A tax on imported goods.

Shifts

refers to movements or changes in economic indicators, demand/supply curves, or other economic paradigms, often due to external factors.