Recently,the Government Considered Adding an Excise Tax on CDs That

question 143

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:

Stockholders' Equity

The portion of a company's assets that belongs to its shareholders, calculated as total assets minus total liabilities.

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including material and labor costs.

Law Firm

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Accounts used to track the expenditures incurred by a business, categorized for financial reporting and analysis.