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Question
A(n) ________ in the elasticity of supply or demand in a market for a good that is taxed would tend to ________ who is legally responsible for paying the tax.
a. decrease; broaden
b. decrease; have no effect on
c. increase; broaden
d. increase; narrow
e. increase; have no effect on
Answer
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Related questions
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When the price elasticity of demand is elastic, a consumer is
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b. relatively unresponsive to a change in price.
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e. completely responsive to a change in price.
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Price gouging laws will usually result in ________ the product in the distressed market.
a. more supply of
b. more local business start-ups to supply
c. government setting up an agency to regulate supply of
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Q:
The economic entity most likely to engage in price gouging is
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Q:
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b. society faces a trade-off between homelessness and rent control.
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Q:
What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
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d. When a binding price ceiling exists, he or she will be willing to pay a lower price.
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Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
d. A shortage will continue to exist and will grow smaller over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
a. Prices in the legal market in the community with a binding price ceiling will rise.
b. Prices in the legal market in the community with a binding price ceiling will fall.
c. There will be shortages in the community with a binding price ceiling.
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Q:
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Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?
a. Legal market prices will rise in the community with a binding price ceiling.
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d. There will be more shortages in the community with a binding price ceiling.
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Q:
Why would a politician find it difficult to remove a binding price ceiling?
a. because it greatly benefits firms, and they would spend a lot of money to lobby against the laws repeal
b. because it greatly benefits government, which receives additional tax revenue as a result
c. because it greatly benefits all consumers, and they are also voters
d. because it greatly benefits some consumers who are also voters
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Q:
Which of the following is an accurate statement about the consequence of a binding price floor?
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e. Binding price floors cause consumers to want to purchase more of the product in the legal market.
Q:
Taxing goods with very inelastic supply generates less deadweight loss than taxing goods with very elastic supply because
a. producers have to pay these taxes out of pocket.
b. the amount of the tax is larger.
c. the change in producer behavior is smaller.
d. the government does not bother collecting the revenue.
e. the change in producer behavior is greater.
Q:
Taxing goods with very inelastic demand generates less deadweight loss than taxing goods with very elastic demand because
a. the change in consumer behavior is smaller.
b. the amount of the tax is larger.
c. consumers have to pay these taxes out of pocket.
d. the government does not bother collecting the revenue.
e. the change in consumer behavior is greater.
Q:
The maximum amount of tax revenue is generated when the good being taxed has aa. somewhat elastic demand. b. perfectly elastic demand. c. somewhat inelastic demand.d. perfectly inelastic demand.e. decreasing demand over time.
Q:
Peanut butter and jelly are complements. If a tax is imposed on peanut butter, how will that affect the market for jelly?
a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
c. The supply of jelly will increase and the price will decrease.
d. Both the supply and demand for jelly will increase along with the price.
e. The supply of jelly will decrease and the price will increase.
Q:
A tax on milk would likely cause a decrease in the price ofa. ice cream. b. cheese. c. soymilk.d. nondairy creamer.e. breakfast cereal.
Q:
A tax creates no deadweight loss only when either supply or demand isa. somewhat elastic. b. perfectly elastic. c. perfectly inelastic.d. increasing.e. decreasing.
Q:
The deadweight loss from a tax is likely to be less with a good that hasa. few complements. b. many substitutes. c. few substitutes.d. an elastic demand.e. an elastic supply.