Recently the Government Considered Adding an Excise Tax on CDs

question 168

Multiple Choice

Recently the government considered adding an excise tax on CDs that can be used to record music and CD players that can record discs. If this tax were enacted, the most likely effect would be:

• A) that consumers would pay a higher price and producers would sell fewer of these CDs and CD players than before the tax.
• B) no change in consumption or the prices paid by consumers of these CDs and CD players.
• C) that consumers would pay a lower price and producers would receive a higher price for these CDs and CD players than before the tax.
• D) an increase in economic activity due to the tax.

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Definitions:

Western Planting

The historical process of establishing settlements and colonies in the Western Hemisphere, especially by European powers.

North America

A continent comprising primarily of Canada, the United States, and Mexico, known for its diverse ecosystems and rich cultural heritage.

Spain

A country in southwestern Europe on the Iberian Peninsula, known for its rich history, cultural diversity, and significant contributions to art, literature, and science.