The economic way of thinking suggests that if the government imposed a $500 tax on owners of red automobiles,
A) fewer red automobiles would be produced and sold.
B) more red automobiles would be produced and sold.
C) there would be no change in the number of red automobiles produced and sold.
D) red automobiles would cease to exist.

Question

Quizplus · Accepted Answer

A $500 tax on red automobiles would increase the cost of owning such cars, leading to a decrease in demand and consequently fewer red automobiles being produced and sold.

The Economic Way of Thinking Suggests That If the Government