How would the market for smartphones be affected if the government charged an excise tax of 5.00 on each smartphone sold?
A) The supply of smartphones would decrease.
B) The demand for smartphones would increase.
C) The demand for smartphones would decrease.
D) The price of smartphones would rise by 5.00.
Question 2
Public goods are characterized by the free-rider problem because
A) no one can be excluded from the benefits of public goods once they are produced.
B) public goods are usually things that people really do not want to consume.
C) public goods are characterized by the principle of rival consumption.
D) public goods can easily be subdivided into small units.
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