If elasticity of demand is 0.2, elasticity of supply is 0.5, and a 10 percent excise tax is levied on the good:
A. the tax burden on consumers will be greater.
B. the tax burden on suppliers will be greater.
C. the tax burden will be the same for both.
D. one cannot say who will bear the greater burden without knowing the tax.
Answer: A
You might also like to view...
The demand curve for federal funds is ________.
A. downward-sloping, because higher interest rates encourage commercial banks to borrow federal funds B. upward-sloping, because higher interest rates encourage commercial banks to lend federal funds C. downward-sloping, because higher interest rates discourage commercial banks from borrowing federal funds, but lower rates encourage borrowing D. upward-sloping, because higher interest rates discourage commercial banks from lending federal funds
What would happen to a government's total debt if it ran a budget deficit?
A) Total debt would increase. B) Spending would increase. C) Total debt would decrease. D) Spending would decrease.
The short-run aggregate supply curve will shift to the right when:
A. Energy prices increase. B. Government regulation increases. C. Prices of inputs decrease. D. Investment spending decreases. E. Productivity rates decrease.
The Clayton Act of 1914:
A. prohibited selling products at "unreasonably low prices" with the intent of reducing competition. B. made it illegal to monopolize a market. C. repealed the Sherman Act. D. outlawed price discrimination for the purpose of reducing competition.