The elasticity of demand for chocolate chip cookies is 0.6 and the elasticity of supply for these cookies is 1.9. If a tax is imposed on purchases of chocolate chip cookies, then the
A) consumers would pay more of the tax.
B) producers would pay more of the tax.
C) tax would be equally shared by the consumers and the producers.
D) consumers would pay the entire tax because their demand is less elastic than the producers' supply.
A
You might also like to view...
Compare and contrast absolute advantage and comparative advantage
What will be an ideal response?
Refer to Figure 26-8. In the figure above, if the economy is at point A, the appropriate monetary policy by the Federal Reserve would be to
A) lower interest rates. B) raise interest rates. C) raise income taxes. D) lower income taxes.
If people become pessimistic about the state of the economy, the consumption function shifts upward
a. True b. False Indicate whether the statement is true or false
If Harry only pays $25,000 to purchase a new car even though he would have been willing to pay as much as $35,000 for the car, this indicates that
What will be an ideal response?