If a Tax Is Levied on the Buyers of a Product,then

question 126

Multiple Choice

If a tax is levied on the buyers of a product,then there will be a(n)

• A)upward shift of the demand curve.
• B)downward shift of the demand curve.
• C)movement up and to the left along the demand curve.
• D)movement down and to the right along the demand curve.

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Definitions:

Absolute Price

The price of a good or service without taking inflation or purchasing power into account.

Indifference Curves

A graph showing different bundles of goods between which a consumer is indifferent, pointing out the preferences of the consumer for one combination of goods over another.

Bowed Inward

A description often used in economics to illustrate a production possibility frontier that indicates increasing opportunity costs for producing goods.

Budget Constraint

The limit on the consumption bundles that a consumer can afford to purchase based on their income and the prices of goods and services.