If the supply curve is perfectly elastic, the burden of a tax on suppliers is borne:
A. entirely by the consumers.
B. entirely by the suppliers.
C. partly by the suppliers and mostly by the consumers if the demand curve is elastic.
D. mostly by the suppliers and partly by the consumers if the demand curve is inelastic.
Answer: A
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When prices do not change very much, the income-expenditure model can be used to understand economic fluctuation in the
A) long run. B) fiscal year. C) short run. D) federal budget allocation.
A ____ is a graph whose axes show the quantities of two inputs that are used to produce some output
a. production indifference map b. two-variable diagram c. scalar diagram d. time-series graph
In the short run, international trade allows a monopolistically competitive firm an opportunity:
a. to produce more output. b. to earn monopoly profits. c. to reduce its average costs. d. to produce more output, earn monopoly profits, and reduce its average costs.
Refer to the above figure. If the aggregate demand curve shifts beyond AD5, then the economy will experience
A. stagflation. B. cost-push inflation. C. structural inflation. D. demand-pull inflation.