Consider a 10% Excise Tax That Is Similarly Applied to Good

question 28

Multiple Choice

Consider a 10% excise tax that is similarly applied to good X,which has a price elasticity of 2.7,and to good Y,that has a price elasticity of 0.6.We can predict that the excess burden of this tax in the market for good X will be ________ the excess burden in the market for good Y.

• A)no larger than
• B)equal to
• C)smaller than
• D)larger than
• E)2.1 times the size of

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Definitions:

IVP

Intravenous pyelogram, a radiographic test that uses contrast dye to visualize the kidneys, ureters, and bladder.

Contrast Media

Substances used in medical imaging to improve the visibility of internal organs and structures.

Short of Breath

A sensation of not being able to draw a deep breath; often associated with conditions affecting the heart or lungs.

Diagnostic Radiology

The use of X-ray technology to determine the cause of a patient’s symptoms.