When the Government Places a Tax on a Good and All

question 26

Multiple Choice

When the government places a tax on a good and all else is held constant,which of the following would most likely happen?

• A) The overall consumption of the good decreases, assuming the good does not have a vertical demand curve.
• B) The price the buyer pays for the good decreases, assuming the good does not have a horizontal demand curve.
• C) The supply curve shifts to the right.
• D) The government receives no tax revenue if the tax is more than 20%.
• E) The price and quantity adjust back to the competitive market equilibrium point.

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Definitions:

Falsifiability

A principle in the philosophy of science that suggests a statement or theory must be capable of being proven false as a criterion for determining its scientific validity.

Circularity

The property of being circular or having a circular logic, often referring to arguments or reasoning where the conclusion is assumed in one of the premises.

Inter-rater Reliability

A measure of consistency between different observers or raters in the assessment of the same phenomenon.

Consistency

This term often refers to the characteristic of behaving in a similar manner over time, showing reliability in actions, values, or methods.