The Quantity Sold in a Market Will Increase If the Government

question 194

Multiple Choice

The quantity sold in a market will increase if the government

• A)decreases a binding price floor in that market.
• B)increases a binding price ceiling in that market.
• C)decreases a tax on the good sold in that market.
• D)More than one of the above is correct.

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Definitions:

Income Taxes

Taxes levied by governments on the income generated by individuals or businesses.

LIFO Assumption

A method of inventory valuation where the last items placed into inventory are the first ones to be used or sold.

Inventory Costing Method

A system used to assign costs to inventory and determine the cost of goods sold, examples include FIFO, LIFO, and weighted average.

Declining Prices

A market condition where the prices of goods or services decrease over time, often indicating a surplus or decreased demand.