Q&A Hero

Q: Which is a correct statement about a rent control law? a. A rent control law is a price floor law that makes apartments cheaper to rent but discourages property owners from renting out apartments. b. A rent control law encourages property owners to convert offices and condos into apartments. c. A rent control law reduces housing shortages. d. A rent control law encourages landlords to rent out apartments. e. A rent control law is a price ceiling law that makes apartments cheaper to rent but discourages property owners from renting out apartments.

Q: An example of a binding price ceiling is ________ the equilibrium price. a. a minimum wage law that is set above b. rent control that is set above c. a black market that sets the price below d. a minimum wage law that is set below e. rent control that is set below

Q: Price gouging laws a. are necessary and proper to prevent predatory pricing on victims of disasters. b. keep distressed markets in equilibrium by maintaining normal prices. c. restrict entrepreneurial behavior and consumer choice. d. are enacted to encourage government-sponsored relief efforts. e. have little effect on distressed markets and thus are irrelevant.

Q: Refer to the accompanying figure. If there is a $700 government-imposed price antigouging law imposed on generators, how will the market be affected in the short run?a. There will be a shortage of 200 generators.b. There will be a shortage of 100 generators.c. The government will intervene and order a surplus of 100 generators.d. Price gougers will enter the market and provide a surplus of 100 generators.e. No changes will occur in the market, since anti-price-gouging laws are now in effect.

Q: 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 d. more Craigslist postings for e. more demand than supply of

Q: The economic entity most likely to engage in price gouging is a. the manufacturer of the product, such as a Honda generator. b. a national big-box store, such as Target or Walmart. c. a local, regular supplier of the product. d. an individual or business who has a supply of the product somewhere else. e. a local resident who wants to get rid of his or her own product.

Q: Price gouging laws are an example of a. rules for keeping market prices low enough for buyers to afford the product. b. a price ceiling. c. rules to prevent a market shortage. d. rules to prevent black market pricing. e. prices to allow rationing to the highest bidder.

Q: Which of the following is NOT a mechanism for allocating housing in rent-controlled areas?a. ethnicity b. waiting lists c. priced. bribes/kickbackse. political favors

Q: The usual stated political goal of rent control is a. to conduct social engineering via economic rules. b. to pander to real estate landlords by assuring them a low occupancy rate. c. to pander to the low income voters by assuring them enough living space. d. to assist the low income at a cost to society, in convenient, affordable housing. e. prices that allow rationing to the highest bidder.

Q: The long-run effects of rent control support one of the five foundations of economics, namely, that a. people respond to incentives. b. society faces a trade-off between homelessness and rent control. c. one must give up something in order to get something else. d. social planners must think marginally in allocating housing. e. exchange makes everyone better off.

Q: A real-life, long-run example of a binding price ceiling isa. a minimum wage law. b. rent control. c. a price gouging law.d. a black market price.e. a ration price.

Q: What will an individual do differently as a seller in the black market in the long run? a. He or she will substitute away from producing the product. b. He or she will substitute toward producing the product. c. When there exists a binding price floor, he or she will be able to sell the good at a higher price. d. When there exists a binding price ceiling, he or she will be able to sell the good at a lower price. e. What he or she does as a seller in the long run will be no different from what he or she does in the short run.

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. b. He or she will substitute toward the product. c. When a binding price floor exists, he or she will be willing to pay a higher price. d. When a binding price ceiling exists, he or she will be willing to pay a lower price. e. What he or she does as a buyer in the long run will be no different from what he or she does in the short run.

Q: How do producers who are subject to a binding price ceiling respond as the time frame shifts from the short run to the long run? a. Producers are increasingly willing to substitute away from producing the good, and their elasticity of supply becomes less elastic. b. There are no changes, and elasticity of supply remains unchanged. c. Producers are increasingly willing to substitute away from producing the good, and their elasticity of supply becomes more elastic. d. Producers are less willing to substitute away from producing the good, and their elasticity of supply becomes less elastic. e. Producers are less willing to substitute away from the good, and their elasticity of supply becomes more elastic.

Q: How do consumers who are subject to a binding price ceiling respond as the time frame shifts from the short run to the long run? a. Consumers are increasingly willing to substitute away from the good, and their elasticity of demand becomes less elastic. b. There are no changes, and elasticity remains unchanged. c. Consumers are increasingly willing to substitute away from the good, and their elasticity of demand becomes more elastic. d. Consumers are less willing to substitute away from the good, and their elasticity of demand becomes less elastic. e. Consumers are less willing to substitute away from the good, and their elasticity of demand becomes more elastic.

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. e. The amount of the surplus will not change.

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. d. More consumers will purchase products in the community with the price ceiling. e. The black market in his community will be larger than the black market in the community with the binding price ceiling.

Q: Katherine is the president of the United States. In an attempt to make gasoline prices cheaper, she has imposed a binding price ceiling on gas. What would she expect her critics to say? a. The binding price ceiling will encourage oil companies to deplete the resource too quickly. b. The binding price ceiling will discourage individuals from using their personal automobiles to commute to work or school. c. The binding price ceiling will cause firms to minimize their spending on the research and development of alternatives to gasoline. d. The binding price ceiling will increase the likelihood that customers obtain needed gasoline on the black market. e. The binding price ceiling will cause firms to produce only gasoline of the highest quality.

Q: Roland is the president of the United States. In an attempt to make prescription drug prices cheaper, he has imposed a binding price ceiling on drugs. What would he expect his critics to say? a. The binding price ceiling will encourage companies to overproduce drugs and will result in waste. b. The binding price ceiling will discourage patients from obtaining the drugs they need. c. The binding price ceiling will increase the likelihood that consumers will obtain needed drugs on the black market. d. The binding price ceiling will cause firms to spend too many resources on the research and development of new drugs. e. The binding price ceiling will cause firms to spend too much time making a drug without any flaws.

Q: In some countries, a binding price ceiling is placed on prescription medicines. What would someone expect the prescription medicine market to be like in these countries? a. The legal maximum price would mean that all consumers are able to receive the medicines they need at prices they can afford. b. The legal maximum price would mean that pharmaceutical companies face an incentive to sell more prescription medicines in that country. c. The legal maximum price would mean that it is unlikely that an illegal and dangerous black market for prescription drugs will form in that country. d. The legal maximum price would mean that pharmaceutical companies face an incentive to develop new prescription medicines. e. The legal maximum price would mean that not all consumers will have access to prescription medicines.

Q: One strategy someone might use to be elected mayor of a university town is to place a binding price ceiling on rent for student apartments. What will happen if he or she gets elected and is able to pass such a law? a. The price ceiling will increase the number of apartments available for rent. b. The price ceiling will cause the demand curve to shift. c. The price ceiling will cause the supply curve to shift. d. The price ceiling will decrease the number of students who want to rent an apartment. e. The price ceiling will cause students to sleep in their cars or to move in with their friends because they wont be able to find places to live.

Q: Refer to the accompanying figure. At what price would there be the LEAST pressure to form a black market?a. $5 b. $8 c. $13d. $15e. $20

Q: Lets say that Alisha has a friend who was caught illegally selling a good on the black market. When the judge asks her to describe her friends motivation as a seller, which of the following would most likely be her reply? a. My friend sold the good on the black market because a binding price floor had created a shortage in the legal market and my friend was performing a public service by making the good available. b. My friend sold the good on the black market because a nonbinding price ceiling caused the price to be lower on the black market. c. My friend sold the good on the black market because a nonbinding price floor had created a shortage in the legal market and my friend was performing a public service by making the good available. d. My friend sold the good on the black market because a nonbinding price floor made the good too expensive to purchase in the legal market and it was cheaper on the black market. e. My friend sold the good on the black market because a binding price floor resulted in a surplus of the product in the legal market and he needed to get rid of the surplus.

Q: Lets say that Lewis has a friend who was caught illegally buying a good on the black market. When the judge asks him to describe his friends motivation as a buyer, which of the following would most likely be his reply? a. My friend bought the good on the black market because a binding price floor had created a shortage in the legal market and my friend really needed the good. b. My friend bought the good on the black market because a price ceiling caused the price to be lower on the black market. c. My friend bought the good on the black market because a nonbinding price floor had created a shortage on the legal market and my friend really needed the good. d. My friend bought the good on the black market because a binding price floor made the good too expensive to purchase on the legal market and it was cheaper on the black market. e. My friend bought the good on the black market because a nonbinding price floor made the good too expensive to purchase on the legal market and it was cheaper on the black market.

Q: If a good is subject to a binding price ceiling and Anna purchases it on the black market, what can she expect to happen to the availability of the good over time? a. The availability of the good will rise over time as the supply curve becomes more elastic and the demand curve becomes more inelastic. (The shortage of the good will fall.) b. The availability of the good will fall over time as both the supply and demand curves become more elastic. (The shortage of the good will fall.) c. The availability of the good will fall over time as both the supply and demand curves become more elastic. (The shortage of the good will rise.) d. The availability of the good will rise over time as the demand curve becomes more elastic and the supply curve becomes more inelastic. (The shortage of the good will fall.) e. The availability of the good will not change over time.

Q: If a good is subject to a binding price ceiling and you purchase it on the black market, what do you expect to happen to the price over time? a. The black market price will rise over time as the supply curve becomes more elastic and the demand curve becomes more inelastic. b. The black market price will fall over time as both the supply and demand curves become more inelastic. c. The black market price will rise over time as the demand curve becomes more elastic and the supply curve becomes more inelastic. d. The black market price will fall over time as both the supply and demand curves become more elastic. e. The black market price will not change over time.

Q: What would you expect the consequences of size and quality to be for a product sold under a binding price ceiling? a. Both the quality and the size of the product will decrease. b. The quality of the product will increase but the size of the product will decrease. c. Both the quality and the size of the product will increase. d. The quality of the product will decrease but the size of the product will increase. e. Neither the quality nor the size of the product will be affected.

Q: What is the incentive to create a black market when a binding price floor exists? a. A black market emerges because buyers are frustrated with shortages of the product. b. A black market emerges because sellers have an incentive to charge a higher price on the illegal market. c. A black market emerges because sellers want a market where they can sell higher-quality products. d. A black market does not emerge; the price will eventually fall to the equilibrium price. e. A black market emerges because sellers need a way to dispose of surplus product.

Q: One would expect there to be many customers for a black market good when the opportunity cost of finding the good under aa. binding price floor is high. b. binding price floor is low. c. nonbinding price ceiling is high.d. binding price ceiling is low.e. binding price ceiling is high.

Q: Why does a shortage that occurs under a binding price ceiling increase over time? a. Demand becomes more elastic. b. Demand becomes more inelastic. c. Demand and supply both become more elastic. d. Demand and supply both become more inelastic. e. Demand becomes more elastic, but supply becomes more inelastic.

Q: 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. b. Legal market prices will fall in the community with a binding price ceiling. c. The price and the quantity sold in the community without a nonbinding price ceiling will be the same as the price and quantity in the community with a nonbinding price ceiling. d. There will be more shortages in the community with a binding price ceiling. e. The black market in the community with a binding price ceiling will not be strong because consumers will simply purchase the product in the community that has no price ceiling.

Q: What is the amount of the shortage or surplus in the market for public transportation when the price ceiling is $1.75?a. 100,000 b. 86,000 c. 75,000d. 40,000e. 0 (zero)

Q: Refer to the accompanying figure to answer the following questions.If there is a $180 price ceiling imposed on a textbook, what will be the disequilibrium amount?a. There will be a shortage of 1,500,000 units.b. There will be a shortage of 800,000 units.c. There will not be a shortage.d. There will be a shortage of 3,000,000 units.e. There will be a shortage of 450,000 units.

Q: Refer to the accompanying figure to answer the following questions.At the price of the binding price floor, by how much would the quantity supplied change from the market equilibrium?a. The quantity supplied would increase by 32,000 units.b. The quantity supplied would decrease by 18,000 units.c. The quantity supplied would increase by 30,500 units.d. The quantity supplied would decrease by 30,500 units.e. The quantity supplied would decrease by 32,000 units.

Q: Refer to the accompanying figure to answer the following questions.The market is currently at market equilibrium. If a binding price ceiling of P1 is imposed, by how much would the quantity supplied change?a. It would increase by 32,000 units.b. It would decrease by 18,000 units. c. It would decrease by 30,500 units.d. It would decrease by 30,000 units.e. It would decrease by 32,000 units.

Q: If a price ceiling is imposed at $15 per unit when the equilibrium market price is $12, there will bea. no surplus or shortage. b. a surplus. c. a shortage.d. a downward pressure on prices.e. an upward pressure on prices.

Q: What will happen in a market where a nonbinding price ceiling is removed? a. There will be downward pressure on the price in the legal market. b. The products sold will improve in quality and become more plentiful. c. Sellers will face a reduced incentive to sell the products. d. The price and quantity will not change in the legal market. e. There will be increased pressure to buy and sell the goods on the black market.

Q: Setting a price ceiling below the equilibrium price can result in a. a surplus, where the quantity demanded exceeds the quantity supplied. b. a shortage, where the quantity demanded exceeds the quantity supplied. c. a surplus, where the quantity supplied exceeds the quantity demanded. d. a shortage, where the quantity supplied exceeds the quantity demanded. e. no impact on the quantity demanded or on the quantity supplied.

Q: Use the following information to answer the following questions.Market for a new hardcover book:Demand: Qd = 325 u2013 8PSupply: Qs = u201360 + 3PWhat would be the quantity supplied if a price floor is set at $20?a. 90 b. 45 c. 265d. 165e. 305

Q: Use the following information to answer the following questions.Market for used cars:Demand: Qd= 154,000 86PSupply: Qs= 100 + 14PWhat would be the quantity supplied if a price floor is set at $100?a. 100 b. 154,100 c. 1,541d. 21,474e. 1,300

Q: Use the following information to answer the following questions.Market for flat-screen TVs:Demand: Qd= 2,600 5PSupply: Qs= 1,000 + 10PWhat would be the quantity demanded if a price floor is set at $100?a. 240 b. 2,100 c. 0d. 1,400'e. 700

Q: Mortimer loves sushi. He loves sushi so much that he asks his congressional representative to work for passage of a binding price ceiling law. Who would be affected by this law and how? a. Sellers would benefit from such a law because they would receive a higher price for their products. b. Consumers would benefit from such a law because prices would be lower and all would be able to purchase sushi cheaply. c. Consumers would benefit from such a law because the sushi would be made of higher-quality fish, and each serving would be larger than it had been with no binding price ceiling in place. d. Some consumers would benefit from such a law because prices for sushi would be lower for those able to buy it in the legal market. e. Sellers would benefit from such a law because they would be able to sell higher-quality sushi and thus capture a larger share of the market.

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 e. because it greatly benefits society as a whole, with all consumers able to buy as much as firms produce

Q: Do all buyers benefit from a binding price ceiling? a. Yes. A binding price ceiling benefits all buyers because it allows them to obtain the good in the legal market. b. No. A binding price ceiling benefits only some buyers because not all are able to obtain the good in the legal market. c. No. A binding price ceiling benefits no buyers because sellers are unwilling to sell any of their products. d. No. A binding price ceiling benefits only some buyers because, although the price is initially lower, it eventually increases to the equilibrium price. e. No. A binding price ceiling benefits no buyers because they are unwilling to buy any of the products at a price higher than the equilibrium.

Q: Why does a surplus exist under a binding price floor? a. It encourages sellers to produce less of the product. b. It encourages buyers to purchase more of the product. c. It makes the price so high that the quantity supplied exceeds the quantity demanded in the legal market. d. It makes the price so low that the quantity demanded exceeds the quantity supplied on the legal market. e. It discourages sellers from increasing the quality of the products they sell, which in turn increases the quantity demanded.

Q: Why do shortages develop under a binding price ceiling? a. It encourages sellers to produce more of the product. b. It encourages buyers to purchase less of the product. c. It makes the price so low that the quantity demanded exceeds the quantity supplied in the legal market. d. It makes the price so low that the quantity demanded exceeds the quantity supplied on the black market. e. It encourages sellers to increase the quality of the products they sell, which in turn increases the quantity demanded.

Q: What will happen in a market where a binding price ceiling is removed? a. There will be downward pressure on the price in the legal market. b. The products sold will improve in quality and become more plentiful. c. Sellers will face a reduced incentive to sell the product. d. Buyers will find the good more difficult to obtain in the legal market. e. There will be increased pressure to buy and sell the good on the black market.

Q: Why are binding price ceiling laws passed? a. They make goods more expensive (and profitable) for firms. b. They encourage sellers to produce more of a good. c. They encourage producers to sell higher-quality products. d. They permit customers to obtain higher-quality products. e. They make a good less expensive for those customers who are able to purchase the good in the legal market.

Q: At very low tax rates________ is much larger than________. a. supply; demand b. willingness to pay; deadweight loss c. demand; supply d. tax revenue; deadweight loss e. tax revenue; willingness to sell

Q: As a tax rate grows larger and larger, eventually a. supply can outweigh demand. b. willingness to pay can outweigh deadweight loss. c. demand can outweigh supply. d. deadweight loss can outweigh tax revenue. e. tax revenue can outweigh willingness to sell.

Q: How successful would a $1 excise tax on each Little Caesars pizza be in generating revenue if Little Caesars is the only pizza chain that is taxed? a. Many people like Little Caesars, so demand is inelastic and the tax revenue generated will be large. b. You can get pizza at many other places, which makes the demand for Little Caesars relatively elastic and, as a result, the tax revenue collected will be small. c. The supply of Little Caesars pizza is perfectly inelastic, so this tax would not generate any revenue. d. The demand for Little Caesars pizza is perfectly elastic, so the tax will not generate any revenue. e. The supply of Little Caesars pizza is perfectly elastic, so this tax will generate the maximum amount of revenue.

Q: The benefit to society from the imposition of a tax is thea. lost consumer surplus. b. deadweight loss. c. tax revenue.d. lost producer surplus.e. the reduction in social welfare.

Q: Producers will lose no producer surplus due to a tax if supply in their market is perfectly elastic because a. consumers can effortlessly change their behavior in response to the tax. b. firms will decide not to pay the tax to the government. c. the government will decide to tax something else. d. the amount of the tax is relatively low. e. producers can effortlessly change their behavior in response to the tax.

Q: If a tax is imposed on a good with a perfectly elastic supply, the burden of the tax will be borne a. by both consumers and producers equally. b. by consumers alone. c. by producers alone. d. mostly by consumers but partially by producers. e. mostly by producers but partially by consumers.

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 elastic supply generates more deadweight loss than taxing goods with very inelastic supply because a. the amount of the tax is larger. b. the change in producer behavior is greater. c. producers have to pay these taxes out of pocket. d. the change in producer behavior is smaller. e. the government does not bother collecting the revenue.

Q: A good with a ________ supply generates no deadweight loss when taxed.a. perfectly elastic b. perfectly inelastic c. somewhat elasticd. somewhat inelastice. slowly increasing

Q: When supply is perfectly elastic, the supply curve isa. vertical. b. upward sloping. c. U-shaped.d. horizontal.e. downward sloping.

Q: Producers bear the entire incidence of a tax when a. supply is perfectly inelastic. b. demand is perfectly elastic. c. supply is perfectly elastic. d. demand and supply are equally elastic. e. demand is perfectly inelastic.

Q: Producers will lose no producer surplus due to a tax ifa. supply is somewhat elastic. b. demand is somewhat elastic.c. supply is perfectly elastic.d. demand is perfectly elastic.e. supply is perfectly inelastic.

Q: If a tax is imposed on a good with a perfectly inelastic supply, the burden of the tax will be borne a. by both consumers and producers equally. b. by consumers alone. c. by producers alone. d. mostly by consumers but partially by producers. e. mostly by producers but partially by consumers.

Q: When supply is perfectly inelastic, the supply curve isa. horizontal. b. vertical. c. upward sloping.d. downward sloping.e. U-shaped.

Q: If the demand for bread is more elastic than the supply of bread, which group will bear more of the incidence of a tax on bread? a. consumers b. the government c. neither consumers nor producers d. producers e. both consumers and producers equally

Q: Irelands tax on plastic shopping bags successfully reduced consumer use of these bags because the a. demand for plastic bags is very inelastic. b. grocery stores in Ireland refused to collect the tax. c. demand for plastic bags is very elastic. d. supply of plastic bags is very inelastic. e. demand for plastic bags was increasing.

Q: Consumers will lose no consumer surplus due to a tax if demand in their market is perfectly elastic because a. consumers can effortlessly change their behavior in response to the tax. b. firms will decide not to pay the tax to the government. c. the government will decide to tax something else. d. the amount of the tax is relatively low. e. producers can effortlessly change their behavior in response to the tax.

Q: Goods that are necessities are very likely to havea. highly elastic demand. b. highly elastic supply. c. highly inelastic demand.d. very low demand.e. very low supply.

Q: When a good with a perfectly inelastic demand is taxed, the incidence of the tax is borne a. entirely by producers. b. by consumers and producers equally. c. entirely by consumers. d. mostly by consumers. e. mostly by producers.

Q: Taxing a good with very elastic demand generates more deadweight loss than taxing a good with very inelastic demand because a. the amount of the tax is larger. b. the change in consumer behavior is greater. c. consumers have to pay these taxes out of pocket. d. the change in consumer behavior is smaller. e. the government does not bother collecting the revenue.

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: Consumers will lose no consumer surplus due to a tax ifa. demand is somewhat elastic. b. supply is perfectly elastic. c. supply is somewhat elastic.d. demand is perfectly elastic.e. demand is perfectly inelastic.

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: When demand is perfectly elastic, the demand curve isa. vertical. b. upward sloping. c. U-shaped.d. horizontal.e. downward sloping.

Q: When demand is perfectly inelastic, the demand curve isa. horizontal. b. vertical. c. upward sloping.d. downward sloping.e. U-shaped.

Q: If a tax is imposed on a good where both supply and demand are somewhat elastic, but demand is more elastic than supply, the burden of the tax will be borne a. by consumers and producers equally. b. by consumers alone. c. by producers alone. d. mostly by consumers but partially by producers. e. mostly by producers but partially by consumers.

Q: 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; broadend. increase; narrowe. increase; have no effect on

Q: If a tax is imposed on a good with equally elastic supply and demand, the burden of the tax will be borne a. by consumers and producers equally. b. by consumers alone. c. by producers alone. d. mostly by consumers but partially by producers. e. mostly by producers but partially by consumers.

Q: When a good with equally elastic demand and supply is taxed, the incidence of the tax is bornea. entirely by consumers. b. entirely by producers. c. by both consumers and producers.d. mostly by consumers.e. mostly by producers.

Q: The incidence of a tax is determined by a. the relative elasticities of supply and demand. b. who pays the tax out of pocket. c. whether the supply curve or demand curve shifts as a result of the tax. d. how much tax revenue it generates. e. how much paperwork there is to complete.

Q: In a market where supply and demand are both somewhat elastic, but demand is more elastic than supply, consumers will bear less of the burden of a tax because a. consumers have a greater ability to change their behavior in response to the tax than producers do. b. producers are more likely to be responsible for paying the tax out of pocket. c. both parties have equal ability to change their behavior in response to the tax. d. consumers will experience lower prices as a result of the tax. e. producers have a greater ability to change their behavior in response to the tax than consumers do.

Q: In a market where supply and demand are equally elastic, producers and consumers will share equally the burden of a tax because a. producers will simply raise the price of their output in response to the tax. b. consumers will buy less of the good in question once the tax is imposed. c. the tax is more likely to be paid out of pocket by producers. d. the government doesnt care who pays the tax as long as the revenue is collected. e. both have equal ability to change their behavior in response to the tax.