If a unit excise tax is placed on a good for which the demand is very unresponsive to a price change, then
A) the government generally pays the majority of the tax.
B) the consumers generally pay the majority of the tax.
C) the producers generally pay the majority of the tax.
D) producers and consumers pay equal portions of the tax.
Answer: B
You might also like to view...
The Cost-Benefit Principle indicates that an action should be taken if:
A. its average benefits exceed its average costs. B. its net benefit (benefit minus cost) is zero. C. its extra benefit is greater than or equal to its extra cost. D. its total benefits exceed its total costs.
A country could correct a balance-of-payments surplus by
A. Expansionary fiscal policy. B. Contractionary monetary policy. C. Increasing tariffs on imported goods. D. Decreasing the money supply.
In the open-economy macroeconomic model, the supply of dollars in the market for foreign-currency exchange comes from
a. net exports b. net capital outflow c. net exports + net capital outflow d. net exports - net capital outflow
Suppose that the demand for digital streaming devices increases significantly. Which of the following questions would a normative analysis answer?
a. Will a change in price affect the increase in demand? b. Will the increase in demand continue? c. How much should we increase our supply of these devices? d. What will be the likely percent increase in demand next month?