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O an increase in the income of consumers of oranges D | Question 28 2 pts When the government places a tax on a good and all else is held constant, which of the following would most likely happen? O The government receives no tax revenue if the tax is more than 20 percent. O The overall consumption of the good decreases, assuming the good does not have a vertical demand curve. O The price and quantity adjust back to the competitive market equilibrium point. The supply curve shifts to the right. O The price the buyer pays for the good decreases, assuming the good does not have a horizontal demand curve. 2 pts Question 29
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When the government places a tax on a good and all else is held constant, then the most likely happen is
The overall consumption of the good decreases, assuming the good does not have a vertical demand curve.

Ans is b) The overall consumption of the good decreases, assuming the good does not have a vertical demand curve.

It is so because when the tax is imposed on a good, the price of the good increases for consumers and decreases for producers, that's why the overall consumption fall ( when demand curve is not vertical).

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