If the Demand for a Good Is Very Price-Elastic, Then

question 150

Multiple Choice

If the demand for a good is very price-elastic, then the imposition of a per-unit tax on that good will cause

• A)the buyers to bear a larger portion of the tax burden.
• B)the sellers to bear a larger portion of the tax burden.
• C)no one to bear any tax burden.
• D)the buyers and sellers to bear the tax burden evenly.
• E)no effect on the market for that good.

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Definitions:

Interest Annually

The payment received or paid out for the use of money on a yearly basis.

Principal Due

The amount of the original loan or bond issue that is still owed, excluding interest payments.

Discount Rate

The interest rate used to discount future cash flows to their present value, important in the evaluation of investment opportunities.

Monthly Payments

Regular payments made over a period of time, often associated with loans or leases.