Assume the demand for automobile tires is highly inelastic and that the supply is highly elastic. The burden of a $2 excise tax on each tire will be:
A. borne by resource suppliers that provide the inputs for manufacturing tires.
B. shared about equally by buyers and sellers of tires.
C. borne primarily by buyers of tires.
D. borne primarily by sellers of tires.
Answer: C
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Under the gold standard, to increase the money supply in the country, the government must
A) increase the value of the country's currency on foreign exchange markets. B) simply print more currency. C) have enough gold to back up the increase in the money supply. D) buy foreign currencies with dollars to increase foreign currency reserves.
Use production functions from the economic growth model to explain why the United States grew at a much faster rate than the Soviet Union in the latter half of the 20th century
What will be an ideal response?
Efficiency losses are
A) deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price. B) the total loss in consumer surplus from a tariff. C) the increase in producer surplus that is created by a tariff. D) the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.
The quantity demanded of a good
a. is the amount that would be purchased with an unlimited income b. is the amount that would be demanded even if income were zero c. is subject to the buyer's income constraints d. is a fixed amount unaffected by the buyer's circumstances e. must match the amount actually purchased in the market