Multiple Choice
Most studies show that the price elasticity of demand for gasoline is -0.2. If the price elasticity of supply is 2, then a tax on gasoline will:
A) have no effect on the market equilibrium price of gasoline.
B) cause the market equilibrium price of gasoline to fall.
C) cause the market equilibrium price paid by buyers to rise.
D) cause the net price received by sellers to fall.
E) both c and d
Correct Answer:
Verified
Correct Answer:
Verified
Q1: Differential tax incidence measures the effect:<br>A)that a
Q2: A lump-sum tax can distort prices and
Q4: If the market supply of labor services
Q6: The excess burden of a tax on
Q15: A $0.30 per unit tax is imposed
Q16: If the tax on the sale of
Q17: The efficiency-loss ratio relative to tax is:<br>A)
Q23: A consumer currently pays $500 a year
Q30: Lump-sum taxes can vary in amount based
Q37: A lump-sum tax only results in income