An Excise Tax Shifts the Supply Curve

question 9

Multiple Choice

An excise tax shifts the supply curve:

• A) down by the amount of the tax.
• B) up by the amount of the tax.
• C) by rotating it counterclockwise.
• D) by rotating it clockwise.

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Definitions:

Average Collection Period

A financial metric indicating the average number of days it takes for a company to receive payments owed by its customers.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest obligations, calculated as earnings before interest and taxes divided by interest expense.

Times Interest Earned Ratio

A financial indicator assessing a company's capacity to pay its interest costs using its earnings before interest and taxes.

Year 2

Generally refers to the second year of operation, or the second year being considered in a multi-year analysis.