The government is deciding where to put a $1 tax-either in a market with elastic supply and demand curves, or a market with inelastic supply and demand curves. If their aim is to raise the most revenue with the smallest deadweight loss, where should the tax be placed?
A. In the market with elastic supply and demand curves
B. Since the burden is shared, it doesn't matter in which market it is placed
C. It is impossible to say without more information
D. In the market with inelastic supply and demand curves
Answer: D
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Suppose that TC = $550, TVC = $500, and MC = $100. If the firm produces 10 units of output, then
A. MC > AVC. B. AVC > MC. C. AVC = MC. D. AFC = AVC.
Which statement best describes the challenge in determining whether a trade surplus is good or bad?
a. The challenge in determining whether a trade surplus is good or bad is to understand how the international flows of goods and services are connected with international flows of financial capital. b. The challenge in determining whether a trade surplus is good or bad is to understand how the international flows of goods are connected with international flows of financial capital. c. The challenge in determining whether a trade surplus is good or bad is to understand how the international flows of services are connected with international flows of financial capital. d. The challenge in determining whether a trade surplus is good or bad is to understand how the international flows of investments are connected with international flows of financial capital.
Medicaid and food stamps are
a. available only to the elderly. b. forms of in-kind assistance. c. forms of cash assistance. d. transfer payments.
One cause of the 2008 financial crisis was that many mortgage brokers were ______.
a. warning borrowers not to borrow too much b. discouraging borrowers from using new hybrid loans c. encouraging borrowers to borrow more than they could afford d. promoting fixed-rate mortgages instead of adjustable-rate mortgages