QUESTION 43 2 points Save Answer Pand 1 Pandl 2 1237 Refer to the figure above.

Question

QUESTION 43 2 points Save Answer Pand 1 Pandl 2 1237 Refer to the figure above. Suppose that the government is concerned about obesity in the United Arab Emirates. The government is considering two plans. One would require "junk food" producers to include warning labels on all junk food. The other would impose a tax on all products considered to be junk food. We could illustrate the tax as producing a movement from OA. Point B to Point A in Panel 1 OB. Point C to Point A in Panel 2 C. Point A to Point B in Panel 1 OD. Point A to Point C in Panel 2

Explanation / Answer

Correct Answer:

D

Due to tax, the final price will increase and demand will decrease. Here, the movement will be along the demand curve and from A to C.

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