If Elasticity of Demand Is 1

question 88

Multiple Choice

If elasticity of demand is 1.8, elasticity of supply is 0.7, and a 20 percent excise tax is levied on the good:

• A) the tax burden on suppliers will be greater.
• B) the tax burden on consumers will be greater.
• C) the tax burden will be the same for both.
• D) one cannot say who will bear the greater burden without knowing the tax.

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Definitions:

Attitudinal Structuring

Activities and strategies used in negotiations focusing on managing relationships, trust, and perceptions among parties to achieve mutually beneficial outcomes.

Affinity Method

A technique used in project management and brainstorming that organizes a large amount of data into groups based on their natural relationships.

Collaborative Economic Bargaining

The process where employers and employees negotiate working conditions and terms of employment in a cooperative and mutually beneficial manner.

Costing Methodology

The process or system used to determine the expenses associated with producing a product or providing a service, which can influence pricing, budgeting, and financial analysis.