If the Government Imposes an Excise Tax on Gasoline Equal

Multiple Choice

If the government imposes an excise tax on gasoline equal to $0.25 per gallon and the demand curve for gasoline is downward-sloping, the supply of gasoline will:

A) shift upward and the price will increase by $0.25 per gallon.
B) shift upward and the price will increase by less than $0.25 per gallon.
C) shift downward and the price will decrease by $0.25 per gallon.
D) shift downward and the price will decrease by less than $0.25 per gallon.