Refer to the Information Provided in Figure 4

question 20

Multiple Choice

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow. Figure 4.1
-Refer to Figure 4.1. Assume that initially there is free trade. If the United States then imposes a 10-cent tax per apple,

• A) the quantity of apples demanded will be reduced by 4 million apples per day.
• B) the quantity of apples supplied by U.S. firms will increase by 6 million apples per day.
• C) the price of apples in the United States will increase to 40 cents per apple.
• D) U.S. imports of apples will increase by 6 million per day.

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Definitions:

CPI

The Consumer Price Index is an indicator that calculates the average cost of a selected group of consumer items and services, including transportation, food, and healthcare, aimed at evaluating fluctuations in living expenses.

Market Basket

A collection of goods and services considered representative for measuring inflation or the cost of living in an economy.

Price Increase

A price increase refers to a rise in the cost of goods or services, which can affect consumer demand and purchasing power.

CPI

This index, the Consumer Price Index, measures how the average prices of various consumer services and goods, including food, transportation, and healthcare, evolve using a weighted average technique.