Principles Microeconomics-21 143.201820 COURSE HOME CONTENT RESOURCES COMMUNICAT

Question

Principles Microeconomics-21 143.201820 COURSE HOME CONTENT RESOURCES COMMUNICATION ASS Homework C4-Qulz me Left: 1:15.21 lindsey gregory: Attempt2 Figure 4-6 Price 10 Panel 1 9 10 14 15 Dand I 19 20 234563 ano 24 26 Refer to Figure 4-6. Suppose that t the federal govenment is concerned about obesity in the United States. Congress is two plans. One would require "junk food" producers to include warning labels on all junk food. The other is conc would impose a tax on all products considered to be junk food. We could ilustrate the tax as producing a movement from Point A to Point B in Panel 1. Point B to Point A in Panel 1. Point A to Point C in Panel 2 Point C to Point A in Panel 2. Save 5

Explanation / Answer

Imposing a tax would raise the price of the junk food. Price, therefore, rises.A change in price causes movement on the demand curve. Higher price leads to lower quantity demanded.

A to C in panel 2

Initially consumer was at A, but after price rises, the quantity demanded falls. So consumer moves to C.

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