The more inelastic the demand for a product, the more the actual burden of a tax on the product will:
A. fall on sellers.
B. fall on buyers.
C. fall equally on both buyers and sellers.
D. create a larger deadweight loss (or excess burden).
Answer: B
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An economist observed that as more computers are added to a factory, the costs of production initially decline, reach a minimum, and then rise
In a diagram that has costs on the vertical axis and the number of computers on the horizontal axis, the relationship always is A) negative and then linear after the minimum point. B) linear and then positive after the minimum point. C) negative and then positive after the minimum point. D) positive and then negative after the minimum point. E) negative both before and after the minimum point.
If the required reserve ratio is equal to 10 percent, a single bank can increase its loans up to a maximum amount equal to
A) its excess reserves. B) 10 times its excess reserves. C) 10 percent of its excess reserves. D) its total reserves.
For poor and nonpoor elderly, social security receipts exceeds the sum of interest, dividends, pensions, and earnings
Indicate whether the statement is true or false
Taxes on labor encourage which of the following?
a. labor demand to be more inelastic b. mothers to stay at home rather than work in the labor force c. workers to work overtime d. fathers to take on second jobs