What Would Happen to the Equilibrium Price and Quantity for the Market

question 56

Multiple Choice

What would happen to the equilibrium price and quantity for the market for cigarettes if the government increased the tax and a scientific study came out confirming that smoking cigarettes increased the rate of heart disease?

• A) Equilibrium price will be indeterminate and equilibrium quantity will go down.
• B) Equilibrium price will go up and equilibrium quantity will go up.
• C) Equilibrium price will go down and equilibrium quantity will be indeterminate.
• D) Equilibrium price will be indeterminate and equilibrium quantity will go up.
• E) Equilibrium price will go up and equilibrium quantity will be indeterminate.

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Definitions:

Sequencing

The process of arranging information, objects, or events in a specific logical order.

Pituitary Gland

A pea-sized gland situated at the base of the brain, responsible for controlling and regulating various bodily functions through the secretion of hormones.

Hypothalamus

A part of the brain situated under the thalamus, tasked with overseeing the autonomic nervous system and managing the pituitary gland to maintain various bodily functions such as temperature control, thirst, hunger, and other mechanisms that keep the body in a state of balance.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brain to the lower back, transmitting neural signals between the brain and the body.