Figure 10-9

question 304

Multiple Choice

Figure 10-9
-Refer to Figure 10-9, Panel (b) and Panel (c) . Which of the following is correct?

• A)A tax would move the market in Panel (b) and the market in Panel (c) closer to the socially optimal outcome.
• B)A subsidy would move the market in Panel (b) and the market in Panel (c) closer to the socially optimal outcome.
• C)A tax would move the market in Panel (b) closer to the socially optimal outcome, but a subsidy would move the market in Panel (c) closer to the socially optimal outcome.
• D)A subsidy would move the market in Panel (b) closer to the socially optimal outcome, but a tax would move the market in Panel (c) closer to the socially optimal outcome.

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Definitions:

Note's Face Value

The original value of a note receivable or bond as stated on the document before any interest is added.

Notes Payable

Obligations in the form of written notes.

Accounts Payable

A liability account that records amounts the company owes to suppliers or creditors for goods and services purchased on credit.

Note Payable

A financial obligation or loan evidenced by a written promissory note, specifying terms of repayment.