A-LevelEconomicsGovernment microeconomic intervention9708/12 · Oct/Nov 2023 · Q161 Mark
The government imposes a specific indirect tax of $1 on each unit of a good sold. How does the imposition of the tax shift the demand or supply curve of the good?
AThe demand curve of the good will shift vertically downwards by $1.
BThe demand curve of the good will shift vertically upwards by $1.
CThe supply curve of the good will shift vertically downwards by $1.
DThe supply curve of the good will shift vertically upwards by $1.
✓ Correct answer
D: The supply curve of the good will shift vertically upwards by $1.
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