e of an gas prices for drivers of SUVs B) your high electric bill that results f
ID: 1126009 • Letter: E
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e of an gas prices for drivers of SUVs B) your high electric bill that results from leaving your lights on all night C) secondhand smoke D) the cost you pay your plumber to install a new hot water heater 30) With a tax on consumers, demand: A) shifts in an indeterminate direction B) increases. C) remains in the same location. D) decreases. 31) Since the price of antibiotics does not include all the costs of using antibiotics, the price is too: A) low, and so antibiotics are underused. B) high, and so antibiotics are overused. C) high, and so antibiotics are underused D) low, and so antibiotics are overused. 32 when there are signi ficant extenal costs associated with its production, the market A) a es ofthat good. B) just the right amount C) too much D) too little 33) Ref er to the figure. Suppose the imposition of a per-unit tax on sellers shifts the supply rve from So to Si. The equilibrium quantity sold under the tax is: A) 12. B) 10. C) 4. D) 16. xternalities are: always bad. sometimes good and sometimes bad. always good either good nor bad. Page 710Explanation / Answer
30. D) decreases
When the burden of tax falls on the consumer they will need to pay more than before for the product. Since quantity demanded is inversely proportional to the price so demand will decrease.
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