The General Equilibrium Effects of an Excise Tax on a Commodity

question 31

Multiple Choice

The general equilibrium effects of an excise tax on a commodity which would then be used to fund improvements to our national parks:

• A)would probably raise the price of the commodity and raise the price of labor in the national park system.
• B)would probably lower the price of the commodity and raise the price of labor in the national park system.
• C)would probably raise the price of the commodity and raise the price of labor in the economy as a whole.
• D)would probably raise the price of the commodity and lower the price of labor in the economy as a whole.

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