-Suppose the government has declared beer to be an illegal substance and has imposed penalties on any person caught buying a beer. Selling a beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by
A) 200 quarts.
B) 300 quarts.
C) 400 quarts.
D) 500 quarts.

Question

-Suppose the government has declared beer to be an illegal substance and has imposed penalties on any person caught buying a beer. Selling a beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by
A) 200 quarts. 
B) 300 quarts. 
C) 400 quarts. 
D) 500 quarts.

Quizplus · Accepted Answer

The cost of breaking the law (CBL) has increased, making it more expensive to buy beer. This will lead to a decrease in beer consumption. The correct answer is A.

-Suppose the Government Has Declared Beer to Be an Illegal