Consider an Excise Tax Imposed on Daily Parking Charges in the Downtown

question 79

Multiple Choice

Consider an excise tax imposed on daily parking charges in the downtown of a small city.Before the imposition of the tax,equilibrium price and quantity are $15 and 100 cars parked.(P = $15,Q = 100) .The city government imposes a tax of $3 per car parked per day.Market equilibrium adjusts to P = $18 and Q = 100.Which of the following statements about the burden of the tax is correct?

• A)Price elasticity of supply is 0 and therefore the entire burden of the tax falls on the consumer.
• B)Elasticity of demand is 0 and therefore the entire burden of the tax falls on the consumer.
• C)Elasticity of supply is 1 and therefore the entire burden of the tax falls on the seller.
• D)Price elasticity of demand is 1 and therefore the entire burden of the tax falls on the seller
• E)The burden of the tax is shared equally by the seller and the consumer.

---

Definitions:

Myelin sheath

A fatty layer that encases the axons of some neurons, which helps increase the speed at which information can travel along the nerve cells.

Electrically charged atoms

Atoms that have gained or lost electrons, resulting in a positive or negative electrical charge, known as ions.

Free radicals

Unstable atoms or molecules with an unpaired electron that can cause cellular damage, contributing to aging and diseases.

Cellular wastes

Unwanted or toxic byproducts produced by cells during metabolism and other biological processes, which need to be removed or recycled to maintain cellular health.