Answer the following statements true (T) or false (F)

1. A state government seeking to increase its excise-tax revenues is more likely to increase the tax rate on items with elastic demand.
2. The demand for cocaine among addicts is relatively elastic.
3. The law of supply indicates that the price-elasticity of supply coefficient would have a negative sign.
4. The price elasticity of supply determines how much price as a result of a change in demand.
5. Over a longer time period after a price-change, the price elasticity of supply tends to decrease.







1. FALSE
2. FALSE
3. FALSE
4. TRUE
5. FALSE

Economics

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Economics