The demand for bread is less elastic than the demand for donuts; hence, a tax on bread will create a larger deadweight loss than will the same tax on donuts, other things equal
a. True
b. False
Indicate whether the statement is true or false
False
You might also like to view...
As we move downward along a demand curve for apples,
A) consumer well-being decreases. B) the marginal utility of apples decreases. C) the marginal utility of apples increases. D) Both A and B are true. E) Both A and C are true.
Refer to the accompanying figure. If Laura and Chris are the only two consumers in this market, then when the price of hamburger decreases from $2.50 to $2.00 per pound, the quantity demanded in the market will ________ by ________ pound(s) per week.
A. increase; 1.5 B. decrease; 1 C. decrease; 1.5 D. increase; 1
If the price in a market is above its equilibrium level, there will be a:
A. shortage and upward pressure on price. B. surplus and downward pressure on price. C. surplus and upward pressure on price. D. shortage and downward pressure on price.
Explain why most indifference curves are convex
What will be an ideal response?