Demand for science fiction novels is elastic and supply of science fiction novels is inelastic. When the government puts a $2.00 tax on science fiction novels,
a. buyers will pay most of the tax.
b. sellers will pay most of the tax.
c. buyers and sellers will split the tax evenly.
d. elasticity has nothing to do with who pays the tax.
b. sellers will pay most of the tax.
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Consumer surplus exists when
A) it costs less to produce goods than buyers must pay for them. B) consumers value the good more highly than what they must pay to buy it. C) taxes on goods are less than the appropriate amount. D) the marginal benefit of the good is always equal to or less than the price of the good. E) the price of the good is greater than the marginal cost of producing a unit of the good.
The price elasticity of demand for oil is estimated at 0.05. This value means a 10 percent increase in the
A) quantity of oil demanded will result from a 0.5 percent increase in the price of oil. B) quantity of oil demanded will result from a 0.5 percent decrease in the price of oil. C) price of oil will increase the quantity of oil demanded by 0.5 percent. D) price of oil will decrease the quantity of oil demanded by 0.5 percent.
What is the difference between accounting profits and economic profits? Which of the two concepts is more appropriate for explaining decisions made by entrepreneurs? Explain
What will be an ideal response?
In an open economy, when the Fed increases the supply of money, it will increase net exports and aggregate demand
a. True b. False Indicate whether the statement is true or false