Consumers Will Bear a Larger Burden of an Excise Tax

question 32

Multiple Choice

Consumers will bear a larger burden of an excise tax if

• A)both demand and supply are relatively inelastic.
• B)the tax is collected by firms rather than remitted directly to the government by consumers.
• C)both demand and supply are relatively elastic.
• D)demand is relatively elastic and supply is relatively inelastic.
• E)demand is relatively inelastic and supply is relatively elastic.

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Definitions:

Payoff Table

A decision-making tool used in statistics and business to show the expected outcomes of different decisions under various states of nature.

Decision Matrix

A tool used in decision-making to evaluate and prioritize a list of alternatives or options, based on a set of criteria.

Payback Period Matrix

A conceptual tool used in finance to evaluate the time required for an investment to return its initial cost, considering various scenarios or criteria.

Payoff Table

A table used in decision making to show the possible outcomes or payoffs for different decisions under various states of nature.