Which of the Following Is True About an Excise Tariff

question 26

Multiple Choice

Which of the following is true about an excise tariff?

• A) Domestic firms' marginal cost curves are shifted up by the amount of the excise tariff.
• B) Foreign firms' average cost curves are shifted down by the amount of the excise tariff.
• C) Domestic firms' average cost curves are shifted up by the amount of the excise tariff.
• D) Foreign firms' marginal cost curves are shifted up by the amount of the excise tariff.

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Definitions:

Consumer Expenditure Survey

An annual survey conducted by the Bureau of Labor Statistics to collect data on the spending habits of American consumers.

Consumer Expenditures

The total amount of money spent by consumers on goods and services in a specified period.

Proportion

Proportion refers to the relative relationship in size, amount, or degree between two or more things, often expressed as a ratio or fraction.

Discretionary Income

What remains of someone's earnings for savings, investment, or other expenses after settling tax obligations and necessary personal expenses like shelter and food.