Because the Supply of Land Is Perfectly Inelastic, When Governments

question 61

Multiple Choice

Because the supply of land is perfectly inelastic, when governments tax land, the tax

• A) creates no deadweight loss because the equilibrium quantity is the same as without the tax.
• B) decreases both the demand for and the supply of land.
• C) increases the supply of land because the landlord pays all of the tax.
• D) decreases the supply of land because the landlord pays all of the tax.
• E) creates a deadweight loss because the supply is fixed.

---

Definitions:

Public Company

A corporation whose shares are traded openly on stock exchanges or markets, making its ownership public.

Small Corporations

Refers to corporations with a limited number of shareholders and reduced regulatory requirements.

Board of Directors

A group of individuals elected to represent shareholders and oversee the major decisions and policies of an organization.

Preemptive Right

A shareholder’s right to purchase a proportionate share of every new offering of stock by the corporation.