If demand is perfectly inelastic, the burden of a tax on suppliers is borne:
A. entirely by the consumers.
B. mostly by the suppliers and partly by the consumers if the demand curve is inelastic.
C. entirely by the suppliers.
D. partly by the suppliers and mostly by the consumers if the demand curve is elastic.
Answer: A
You might also like to view...
Suppose that Ruritania has a fixed exchange rate versus the U.S. dollar
If foreign investors become convinced that the Ruritanian currency is overvalued, what actions might they take to profit from this conviction? Would these actions make it easier or harder for Ruritania to maintain the value of its currency versus the dollar? Why?
Which of the following will most likely occur during the recovery phase of a business cycle?
a. Real GDP rises, and unemployment falls. b. Real GDP declines, and inflation rises. c. Interest rates rise, and the number of business failures rise. d. Inflation rises, and employment falls.
If, in the short run, the level of output is zero, which of the following statement is TRUE?
A) Total variable cost is zero but total cost equals total fixed cost, and both of the latter exceed zero. B) Total cost and total fixed cost graphs will begin at the origin. C) Total fixed cost will also be zero at first but will rise once output rises. D) none of the above
The table above gives Jane's total utility from magazines and CDs. The price of a magazine is $4 and the price of a CD is $10. What is the marginal utility per dollar from CDs when the sixth CD is purchased?
A) 40 units B) 30 units C) 15 units D) 5 units