When a Tax Is Imposed on Some Good,what Usually Happens

question 114

Multiple Choice

When a tax is imposed on some good,what usually happens to consumer and producer surplus?

• A) They both increase.
• B) They both fall to zero.
• C) They both decrease.
• D) Consumer surplus increases and producer surplus decreases.
• E) Consumer surplus decreases and producer surplus increases.

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Definitions:

Building Mortgage

A type of loan specifically used for the purchase, construction, or improvement of buildings, secured by the building itself.

Acceleration Clause

A contractual clause that allows a lender to demand immediate repayment of all outstanding loans if certain conditions are violated.

Foreclosure

A legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments, often resulting in the forced sale of the asset used as collateral.

Default Notice Clause

A provision in a contract that specifies the conditions under which a party is considered in default and the notice that must be given to them.