How Would the Elimination of a Sales Tax Affect the Market

question 119

Multiple Choice

How would the elimination of a sales tax affect the market for a product that had been subject to the tax?

• A)The demand for the product would rise and the equilibrium price would fall by the amount of the tax.
• B)The equilibrium price for the product would fall by less than the amount of the tax.
• C)The reduction in government revenue from the tax would be made up by an increase in property taxes.
• D)The supply of the product would become more elastic.

---

Definitions:

Hexane

A straight-chain alkane with six carbon atoms, typically used as a non-polar solvent in organic chemistry.

Net Molecular Dipole Moment

The overall measure of the molecular polarity, determined by the sum of all individual bond dipole moments within a molecule, taking into account their direction and magnitude.

Molecules

The smallest unit of a chemical compound that can exist; made up of two or more atoms bonded together.

Molecular

Relating to or consisting of molecules, the smallest particle in a chemical element or compound that has the chemical properties of that element or compound.