The government imposes a $2.50 per-unit tax on the consumption of good X. As a result the A) supply curve for good X shifts leftward and the price of good X rises. B) quantity demanded of good X falls and the price of good X rises. C) demand curve for good X shifts leftward and the price of good X falls. D) demand curve for good X shifts rightward and the price of good X rises. E) supply curve for good X shifts leftward and the price of good X falls.

The government imposes a $2.50 per-unit tax on the consumption of good X. As a result the A) supply curve for good X shifts leftward and the price of good X rises. B) quantity demanded of good X falls and the price of good X rises. C) demand curve for good X shifts leftward and the price of good X falls. D) demand curve for good X shifts rightward and the price of good X rises. E) supply curve for good X shifts leftward and the price of good X falls.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter4: Demand, Supply, And Markets

Section: Chapter Questions

Problem 2QFR

See similar textbooks

Similar questions

The Demand curve for a good A is P = - 2Q+200 and the Supply curve is P=Q+10.A. Find the equilibrium Price and Quantity B. What is the level of total expenditure in this market?C. What is the price elasticity of demand at equilibrium? D. If there is a law that prevents you from consuming this good, how much should you be compensated by the government to accept it given the Consumer Surplus (CS)? Calculate.Demand shifts to P = - 2Q+260 due to an increase in the price of another good B from $20 to $25 E. Find the New Equilibrium, and Calculate the new Consumer Surplus and the Cross Price Elasticity of Demand. What type of goods are these?
Which of the following must be true if good X is a normal good and income increases? Group of answer choices The demand for X will increase, and thus the price and quantity sold and bought willincrease. The demand for X will decrease, and thus the price and quantity sold and bought willdecrease. The demand for X will increase, and thus the price and quantity sold and bought willdecrease. The demand for X will decrease, and thus the price and quantity sold and bought willincrease.
When The price of good X falls then the demand for Good Y rise. State where Good X and Good Y are Substitute or compliment
The law of demand states that, other things equal, when the price of a good rises, the quantity demanded of the good rises, and when the price falls, the quantity demanded falls. a. True b. False If a determinant of demand other than price changes, the demand curve shifts. a. True b. False
Suppose the supply curve of a good is given by, and the demand curve of a good is given by. What happens to the equilibrium price and quantity after the government taxes suppliers $2 for each unit of production? (Hint: Graph what the new supply curve would look like, and see which answer best makes sense.) A...The supply curve changes to the equilibrium quantity goes down, and the equilibrium price goes up. 2 B...The supply curve changes to the equilibrium quantity goes down, and the equilibrium price goes up. " C...The supply curve changes to the equilibrium quantity goes up, and the equilibrium price goes down. " D...The supply curve changes to the equilibrium quantity goes down, and the equilibrium price goes up. 2
Which one of the following statements is correct?A. A rise in the price of a good will cause the supply curve of that good to shift to the right (ie the supply of the good will increase).B. A fall in the price of a good will result in a rightward shift of the demand curve, ceteris paribus (ie the demand for the product will increase).C. The quantity demanded of a good depends on the availability of the good.D. Demand is a synonym for wants. In other words, if a consumer demands a good it simply means that he or she wants the good.E. A decrease in the prices of the factors of production used to produce a certain product will give rise to an increase in the supply of the product (illustrated by a rightward shift of the supply curve).
Which one of the following statements is incorrect?A. Market demand consists of the combined demand of all the participants in the market.B. The quantity demanded of a good, say a loaf of bread, depends heavily on the availability of the good.C. The quantity demanded of a good depends on the income of consumers.D. The quantity demanded of a good also depends on the prices of related goods (complements and substitutes).E. Demand decisions have to be analysed independently of the supply situation.
There are two consumers in the market for one good (with price P), A and B. Consumer A's inverse demand is given by P = -2QA+5 and consumer B's inverse demand is given by P = -QB+10. At a price of 5, the total quantity demanded is ________ a) 0 b) 0.5 c) 1 d) 1.5 e) 2 f) 2.5 g) 5
For a particular good, a 10 percent increase in price causes a 15 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good? A. There are no close substitutes for this good. B. The good is a necessity. C. The market for the good is broadly defined. D. The relevant time horizon is long.
Two goods are substitutes if a decrease in the price of one good. This will lead to: Select one: a. reduces the quantity demanded of the other good b. increases the demand for the other good. c. increases the quantity demanded of the other good d. reduces the demand for the other good
Do you agree with the following statements? Explain your answers.i. The price of butter rises, causing the demand for another good to fall.This implies that the goods are substitutes. ii. During the pandemic, incomes fell for many Bahamians this changewould likely lead to a decrease in the prices of both normal and inferiorgoods. iii. If the demand and supply of lobster increases at the same time price willrise. iv. The price of milk falls. This causes an increase in the price of goodcheese. Therefore, milk and cheese are complements
what happens to the demand for a normal good when the price rise. Also explain this if we have the case of inferior goods.