Recently the government considered adding an excise tax on CDs that can be used to record music and CD players that can record discs. If this tax were enacted, the most likely effect would be:
A) that consumers would pay a higher price and producers would sell fewer of these CDs and CD players than before the tax.
B) no change in consumption or the prices paid by consumers of these CDs and CD players.
C) that consumers would pay a lower price and producers would receive a higher price for these CDs and CD players than before the tax.
D) an increase in economic activity due to the tax.
Correct Answer:
Verified
Q2: Use the following to answer questions:
Figure: The
Q4: If an excise tax is imposed on
Q5: Use the following to answer questions:
Q6: Suppose the government imposes a $10 excise
Q7: The burden of a tax on a
Q8: Use the following to answer questions:
Q10: If the government imposes a $5 excise
Q12: The burden of a tax on a
Q13: Assuming a normal upward-sloping supply curve and
Q14: An excise tax that the government collects
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents