The demand for chicken wings is more elastic than the demand for razor blades. Suppose the government levies an equivalent tax on chicken wings and razor blades. The deadweight loss would be larger in the market for
a. chicken wings than in the market for razor blades because the quantity of chicken wings would fall by more than the quantity of razor blades.
b. chicken wings than in the market for razor blades because the quantity of razor blades would fall by more than the quantity of chicken wings.
c. razor blades than in the market for chicken wings because the quantity of chicken wings would fall by more than the quantity of razor blades.
d. razor blades than in the market for chicken wings because the quantity of razor blades would fall by more than the quantity of chicken wings.
a
You might also like to view...
When increased government spending results in decreased consumer or business spending, the government spending is said to be crowding out the consumer and business spending
Indicate whether the statement is true or false
Refer to Table 12-1. What is the fixed cost of production?
A) $0 B) $500 C) $1,000 D) It cannot be determined.
________ usually increase(s) when the U.S. economy is in a recession and decrease(s) when the U.S. economy is expanding
A) Net Exports B) Consumer spending C) Unplanned investment D) Planned investment
In a world of scarcity, there has to be some way to ration the available resources. According to economists, the most efficient use of available resources occurs when rationing occurs via
A) queuing. B) lotteries. C) political power. D) the price system.