Suppose a $1 Tax Is Placed on a Good

question 337

Multiple Choice

Suppose a $1 tax is placed on a good. The more elastic the supply of the good, the

• A) larger the increase in the after-tax price.
• B) smaller the decrease in the quantity sold.
• C) less of the tax will be paid by the buyers.
• D) more of the tax will be paid by the sellers.

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Definitions:

Black Widow Spider

A venomous spider known for the female's distinctive black color and red hourglass-shaped mark on its abdomen.

Acetylcholine

A neurotransmitter important for learning and memory, also involved in muscle activation.

GABA

Gamma-aminobutyric acid, a neurotransmitter in the brain that plays a key role in reducing neuronal excitability and is involved in regulating anxiety.

Neurotransmitters

Chemical messengers that transmit signals across a chemical synapse, from one neuron to another target neuron.