For a given elasticity of supply, the more ________ the demand for the good, the share of the tax paid by the buyers is ________.
A) inelastic; larger
B) inelastic; smaller
C) elastic; larger
D) elastic; smaller
E) elastic; the same
Answer: A) inelastic; larger
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Explain how mandatory seat belt laws may reduce the negative externalities of risky behavior
What will be an ideal response?
If price support policy increases producer surplus more than reducing consumer surplus, then
A) the policy leads to a Pareto-superior allocation. B) the policy leads to an increase in social welfare. C) the policy improves the efficiency of society. D) None of above.
. Jaime’s cross price elasticity of science fiction and mystery novels is -4. This means that the novels are
a. compliments. b. normal. c. substitutes. d. inferior.
Economists use the term self-interest to indicate that people ______.
a. mostly act for material gain b. are basically selfish c. make choices for personal satisfaction d. want to become wealthy