The excess burden of an excise tax is
A. greater the more inelastic the supply curve.
B. greater the more elastic the demand curve.
C. smaller the more elastic the supply curve.
D. greater the more inelastic the demand curve.
Answer: B
You might also like to view...
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
By monitoring financial diaries of several of the world's poorest families, economists found that a challenge facing the poor was:
A. they did save any money to pay down debts. B. their income fluctuated a lot, in addition to being low. C. they often did not diversify their savings and had "their eggs all in one basket". D. All of these are true.
Since a firm is willing to sell its product at the marginal cost and since the firm receives the market price, the difference between the two is:
a. consumer surplus. b. economic profit. c. marginal revenue. d. producer surplus. e. a shortage.
Refer to Figure 21-26. Rhonda experiences an increase in her hourly wage. Her optimal choice point moves from A to B. For Rhonda,
a. leisure is a normal good. b. her labor supply curve is backward bending. c. both a and c are correct. d. her labor supply curve is upward sloping.