Producers Will Lose No Producer Surplus Due to a Tax

question 30

Multiple Choice

Producers will lose no producer surplus due to a tax if supply in their market is perfectly elastic because

• A) consumers can effortlessly change their behavior in response to the tax.
• B) firms will decide not to pay the tax to the government.
• C) the government will decide to tax something else.
• D) the amount of the tax is relatively low.
• E) producers can effortlessly change their behavior in response to the tax.

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Definitions:

Sublimation

A psychological defense mechanism where socially unacceptable impulses or idealizations are unconsciously transformed into socially acceptable actions or behavior.

Aggressive Energies

Innate drives or impulses toward hostile or violent behavior, often conceptualized in the context of psychological theories such as Freud's.

Culturally Acceptable

Practices, behaviors, or norms that are deemed appropriate or permissible within a specific cultural or social context.

Collective Unconscious

A concept proposed by Carl Jung referring to the part of a person's unconscious which is derived from ancestral memory and experience shared by all humankind.