The Demand for Food Is Very Inelastic Compared to the Supply

question 38

Multiple Choice

The demand for food is very inelastic compared to the supply of food,so if a tax is imposed on the consumers of food,the tax incidence:

• A)is typically on consumers more than producers.
• B)is typically on producers more than consumers.
• C)is typically split equally between consumers and producers.
• D)cannot be determined without more information.

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Definitions:

Fair Value

The financial gain on unloading an asset or the financial duty to convey a liability in a coordinated market activity at the established valuation date.

Costs of Issuing

Expenses associated with the issuance of stocks or bonds, including underwriting, legal, and registration fees.

Goodwill

An intangible asset that arises when a company is purchased for more than the fair value of its net identifiable assets, representing aspects like reputation, brand, and customer relationships.

Journal Entry

A record in accounting that represents a transaction, showing the accounts and amounts debited and credited, used to transfer values and maintain the ledger.