An excise tax levied on a product will impose a larger relative burden on consumers (and a smaller relative burden on sellers) when
a. the supply of the product is relatively inelastic.
b. the supply of the product is relatively elastic.
c. the demand for the product is relatively inelastic.
d. either b or c is true
D
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Because education generates a positive externality, ______
A. everyone who wants a college education should get one B. graduates' marginal benefit exceeds the society's value of the educa-tion C. the quantity of education undertaken will achieve the social interest if it is free D. subsidies to colleges or vouchers to students are means of achieving the efficient number of graduates
Since the Great Depression, business fluctuations have become more severe and longer in duration
a. True b. False Indicate whether the statement is true or false
The Federal Reserve System
A. regulates not only banks but some of the other financial institutions. B. is directly controlled by the President. C. regulates all financial institutions in the United States. D. controls the fiscal policy of the federal government.
If the economy has been experiencing high inflation, as it was in the late 1970s, sharply reducing that inflation rate through monetary policy (as Paul Volcker did) may
A. increase demand for expensive items like cars and houses. B. produce a recession in the short run. C. increase short-run economic growth, triggering an economic expansion. D. reduce the unemployment rate in the short run.