In the Market for Books, Initially There Are No Taxes

question 212

Multiple Choice

In the market for books, initially there are no taxes on books. Books are normal goods. The government introduces a tax of $4 a book and, at the same time, people's income fall by $4,000 a year. Following these two changes, the equilibrium quantity of books

• A) decreases.
• B) increases.
• C) remains unchanged.
• D) either increases or decreases. We cannot say which.

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Primary Purposes

The main reasons or objectives for which something is done, such as informing, persuading, entertaining, or expressing feelings.

Inform

Inform means to provide information or knowledge to someone, making them aware of something.

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To influence someone to do or believe something through reasoning, argumentation, or appeal to their emotions or values.