Explain the effect of price elasticities of supply and demand on tax incidence
What will be an ideal response?
If demand is less elastic than supply, buyers pay the larger share of the tax. If supply is less elastic than demand, sellers pay the larger share of the tax.
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Describe some of the external benefits associated with education. What can government do to encourage production of the efficient amount of education?
What will be an ideal response?
A buyer is willing to buy 10 units of a good at a maximum price of $10 per unit. The reservation value of the buyer in this case is:
A) $1. B) $10. C) $20. D) $100.
The responsiveness of suppliers to changing prices is called the:
a. cross elasticity. b. supply elasticity. c. supply period. d. long-run. e. market-day.
A monopolist will always charge the highest price it can get.
Answer the following statement true (T) or false (F)