If Supply Is Elastic, the Imposition of a Tax

question 25

Multiple Choice

If supply is elastic, the imposition of a tax

• A)falls more heavily on consumers
• B)falls more heavily on producers
• C)falls more heavily on monopoly sellers than competitive sellers
• D)will alter both buyer and seller plans equally
• E)change seller expectations about consumer tastes

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Definitions:

Budget Line

A visual depiction of every potential pair of two products a consumer is able to buy based on their earnings and the costs of these items.

Utility Function

A mathematical representation of how different quantities of goods or services translate into levels of happiness or satisfaction for an individual or society.

Utility Function

A mathematical representation that assigns a value to every possible choice to indicate the level of satisfaction or utility that choice provides to a consumer.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified period of time.