Suppose the elasticity of demand for a product is 0 and elasticity of supply is 1. If the government imposes a tax on the product, then
A) buyers and sellers pay exactly the same share of the tax.
B) buyers pay all of the tax.
C) sellers pay all of the tax.
D) buyers pay a smaller share of the tax than do sellers, but both buyers and sellers pay some of the tax.
E) because the elasticity of demand is zero, the government collects no revenue from this tax.
B
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Which of the following statements is TRUE?
A) The long-run aggregate supply curve is upward sloping. B) The long-run aggregate demand curve is upward sloping. C) The short-run aggregate supply curve is vertical. D) The long-run aggregate supply curve is vertical.
A stock option is said to be "out of the money" if:
A) the strike price equals the exercise price. B) stock price equals the strike price. C) strike price exceeds the stock price. D) stock price exceeds the strike price.
A federal surplus of $10 billion means that
A. the government plans on collecting $10 billion in taxes this year. B. the government is spending $10 billion a year less than it is collecting in taxes. C. the government has a total debt of $10 billion. D. government spending is $10 billion a year.
The price elasticity of supply is
A) negative. B) zero. C) positive. D) unknown, depending on other factors.