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.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
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.
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