The Difference Between a Tax and a Subsidy Is That

question 17

Multiple Choice

The difference between a tax and a subsidy is that when the government places a tax on a good,it ________ the equilibrium price and ________ the equilibrium quantity,whereas when the government places a subsidy on a good,it ________ the equilibrium price and ________ the equilibrium quantity.

• A) increases; decreases; decreases; increases
• B) increases; increases; decreases; decreases
• C) decreases; decreases; increases; increases
• D) decreases; increases; increases; decreases
• E) increases; does not change; does not change; increases

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Definitions:

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli, allowing organisms to focus on changes in their environment.

Skin Senses

The sensory modalities including touch, temperature, pain, and proprioception that inform an individual about the external environment via the skin.

Expectations

Beliefs or anticipations about the way events, behaviors, or outcomes should happen, often influencing perceptions and behaviors.

Papillae

Small, nipple-like projections on the tongue where taste buds are located, involved in the sense of taste.