When a Tax Is Placed on the Buyers of a Product,a

question 119

Multiple Choice

When a tax is placed on the buyers of a product,a result is that buyers effectively pay

• A)less than before the tax,and sellers effectively receive less than before the tax.
• B)less than before the tax,and sellers effectively receive more than before the tax.
• C)more than before the tax,and sellers effectively receive less than before the tax.
• D)more than before the tax,and sellers effectively receive more than before the tax.

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Definitions:

Prices

The amount of money required to purchase a good, service, or asset, often influenced by supply and demand.

Short-run

A period in which at least one factor of production is fixed, limiting the ability of a business to fully adjust to market changes.

Short-run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a specific time period at current prices.

Short-run Phillips Curve

It illustrates the inverse relationship between the rate of inflation and the unemployment rate in the short term.