The demand for salt is inelastic, and the supply of salt is elastic. The demand for caviar is elastic, and the supply of caviar is inelastic. Suppose that a tax of $1 per pound is levied on the sellers of salt, and a tax of $1 per pound is levied on the buyers of caviar. We would expect that most of the burden of these taxes will fall on
a. sellers of salt and the buyers of caviar.
b. sellers of salt and the sellers of caviar.
c. buyers of salt and the sellers of caviar.
d. buyers of salt and the buyers of caviar.
c
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Which of the following is likely to have the most price inelastic demand?
a. lattés b. filet mignon c. Grey Goose® vodka d. milk
Which of the following most closely represents the share of total U.S. income that flows to the poorest 20 percent of all U.S. households?
a. 49 percent b. 23 percent c. 15 percent d. 4 percent
If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:
A. the firm should try to produce less output. B. total variable costs are constant along the LRAC curve. C. there are economies of scale. D. when output is doubled, total costs are doubled.
Assume a consumer purchases a combination of goods X and Y such that MUx / Px = 20 units of utility per dollar and MUy / Py = 10 units of utility per dollar. To maximize utility, the consumers should buy:
A. less of X and more of Y. B. less of both X and Y. C. more of both X and Y. D. more of X and less of Y.