If an excise tax is placed on a product that has a perfectly inelastic demand, then:
a. the entire tax will be paid by the consumer
b. the entire tax will be paid by the producer.
c. the consumer and producer will each pay a share of the tax.
d. the incidence of the tax cannot be determined unless we know the coefficient of price elasticity of supply.
e. the tax is progressive.
a
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What are the pros and cons of using cold turkey disinflation compared to a policy of gradualism?
What will be an ideal response?
A market with a negative externality
a. will be regulated by the government b. is an example of a natural monopoly c. will be Pareto efficient, as long as bargaining costs are high enough d. will produce less than the efficient quantity, thereby creating a welfare loss e. will produce more than the efficient quantity, thereby creating a welfare loss
When a tax is placed on the sellers of a product, buyers pay
a. more, and sellers receive more than they did before the tax. b. more, and sellers receive less than they did before the tax. c. less, and sellers receive more than they did before the tax. d. less, and sellers receive less than they did before the tax.
An economic system is the organizations and methods used to determine:
a. All of the answers are correct. b. for whom goods and services are produced. c. what goods and services are produced. d. how goods and services are produced.