Suppose an Excise Tax of $1 Is Imposed on Every

question 60

Multiple Choice

Suppose an excise tax of $1 is imposed on every case of beer sold and sellers are responsible for paying this tax.How would the imposition of the tax be illustrated in a graph?

• A)The supply curve for cases of beer would shift to the right by $1.
• B)The supply curve for cases of beer would shift to the left by more than $1.
• C)The supply curve for cases of beer would shift to the left by less than $1.
• D)The supply curve for cases of beer would shift to the left by $1.

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Definitions:

Money Income

Money income refers to the total amount of monetary earnings received by an individual or household, including wages, salaries, bonuses, and income from investments.

Prices

Monetary values assigned to goods and services that reflect their worth or what consumers are willing to pay.

Budget Line

A graphical representation of all possible combinations of two goods that can be purchased with a fixed amount of income.

Money Income

The total amount of monetary earnings received by an individual or household, including wages, salaries, benefits, and income from investments.