ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When there is an increase in unit tax on the production of goods by the government, the unit cost of production will rise and consequently, the firm would supply less than before at the given price. The supply would decrease implying that the supply curve would shift to the left.

Detailed explanation-2: -Due to the imposition of unit tax, the cost of production per unit of output increases, which ultimately increases the marginal cost. Consequently, the LMC curve will shift leftward upward and as the supply curve is a portion of LMC, so the supply curve will also shift leftward upward.

Detailed explanation-3: -When the taxes of any individual decrease, his consumption increases, and due to this the aggregate demand curve shifts right. But when the taxes of an individual increase, his consumption decrease as well as the aggregate demand curve shifts to left.

Detailed explanation-4: -The law of supply states that there is a direct relationship between price and quantity supplied. In other words, when the price increases the quantity supplied also increases. This is represented by an upward sloping line from left to right.

Detailed explanation-5: -Mainly, demand is related to economic policies like GST, Excise duty. If taxes are high then the cost of that product will be high and demand will be low due to such rise in price and vice versa.