If Elasticity of Demand Is 1

question 94

Multiple Choice

If elasticity of demand is 1.8, elasticity of supply is 0.2, and a 20 percent excise tax is levied on the good:

• A) consumers pay 20 percent of the tax.
• B) sellers pay 20 percent of the tax.
• C) consumers pay 10 percent of the tax.
• D) sellers pay 10 percent of the tax.

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Definitions:

Large Intestine

The final section of the gastrointestinal tract that processes waste material and absorbs water and electrolytes, leading to the formation of stool.

Liver

A vital organ in the body that performs essential functions such as detoxification, protein synthesis, and production of biochemicals necessary for digestion.

Small Intestine

The small intestine is a long, coiled tube in the digestive system where most of the digestion and absorption of nutrients occurs.

Gastrin

A hormone secreted by the stomach that stimulates secretion of gastric acid.