Demand for science fiction novels is elastic and supply of science fiction novels is inelastic. When the government puts a $2.00 tax on science fiction novels,
a. buyers will pay most of the tax.
b. sellers will pay most of the tax.
c. buyers and sellers will split the tax evenly.
d. elasticity has nothing to do with who pays the tax.
b. sellers will pay most of the tax.
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Which of the following statements is false?
a) Income elasticity of demand is positive for inferior products. b) Income elasticity of demand is negative for inferior products. c) Income elasticity of demand is positive for normal goods. d) None of the above.
Infant industries are:
a. manufacturing activities that make baby products. b. industries that cannot currently withstand foreign competition but are expected to grow and mature so that they can compete internationally. c. industries that can currently withstand foreign competition in the domestic market but are expected to mature into export industries. d. industries that cannot currently withstand foreign competition in either the domestic or the export market but are expected to mature into multinational firms.
Which of the following is true under natural monopoly?
a. The marginal cost curve will be above the average cost curve. b. The monopolist will set price equal to marginal cost and will earn economic profits. c. Economies of scale exist. d. Output is produced under conditions of constant cost.
Under the Clayton Act, which of the following was illegal, even if it was not shown to lessen competition substantially?
a. Price discrimination. b. Tying contract. c. Horizontal mergers by stock acquisition. d. Interlocking directorates.