If the Elasticity of Demand Is _____ and the Elasticity

question 101

Multiple Choice

If the elasticity of demand is _____ and the elasticity of supply is _____,tax revenue is likely to decrease if the tax rate is increased.

• A)3.3;2.1
• B)3.3;0.5
• C)0.2;2.1
• D)0.2;0.5

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Definitions:

Problem

A situation, question, or issue that presents difficulty, uncertainty, or challenge, requiring resolution or solution.

Opportunity

A chance or set of circumstances that makes it possible to do something.

Programmed Decision

Decisions made in response to routine, predictable situations through the use of established procedures or rules.

Local Electronics Store

A retail outlet specializing in the sale of electronic devices and related accessories to consumers.