To prevent obesity, the government may establish a tax on high caloric foods, such as twinkies. A twinkie tax will have the smallest impact on quantity demanded when the demand curve for twinkies is
A) perfectly elastic.
B) perfectly inelastic.
C) more elastic than the supply curve.
D) both A and B.
B
You might also like to view...
According to the table, the Big Mac would cost the same in Switzerland and the United States at an exchange rate of ________ Swiss franc for every one U.S. dollar
A) 0.86 B) 1.27 C) 1.36 D) 2.72
Good decisions meet many criteria, which of the following is not a main one
a. Quality b. Acceptance c. Flexibility d. Risk
If your firm's production function has constant returns to scale and you increase all your inputs by 60%, then your firm's output will
a. not change. b. increase, but by less than 60% c. increase by 60% d. increase by more than 60%.
According to liquidity preference theory, if there were a surplus of money, then
a. the interest rate would be above equilibrium and the quantity of money demanded would be too large for equilibrium. b. the interest rate would be above equilibrium and the quantity of money demanded would be too small for equilibrium. c. the interest rate would be below equilibrium and the quantity of money demanded would be too small for equilibrium. d. the interest rate would be below equilibrium and the quantity of money demanded would be too large for equilibrium.