The more inelastic the demand for a product, the more the actual burden of a tax on the product will:
A. fall on sellers.
B. fall on buyers.
C. fall equally on both buyers and sellers.
D. create a larger deadweight loss (or excess burden).
Answer: B
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An economic variable that moves in the same direction as aggregate economic activity (up in expansions, down in contractions) is called
A) procyclical. B) countercyclical. C) acyclical. D) a leading variable.
With reference to the graph above, if the intended aim of the price ceiling shown was a net increase in the well-being of consumers, then positive analysis would conclude:
A. the policy was effective, since area A + C is larger than B + D.
B. the policy was effective, since area B is smaller than area D.
C. the policy was ineffective, since D is larger than E.
D. the policy was ineffective, since A + C + D is larger than B + E.
It has been argued that state-subsidized ____ programs have benefited the middle and upper-income quintiles more than the poor
a. food stamp b. housing subsidy c. higher education d. Medicaid
Which of the following is an important aspect of rational self-interest?
a. considering future costs b. considering past costs c. considering future causes d. considering past causes