"For a Given Supply Curve, the Excess Burden of a Tax

question 172

Multiple Choice

"For a given supply curve, the excess burden of a tax will be greater when the demand for a product is less elastic than when the demand is more elastic." This statement is

• A)correct.
• B)incorrect because the incidence of the tax, not the burden of the tax, is affected by the elasticity of demand.
• C)incorrect. When demand is less elastic, the burden of the tax is smaller than when the demand is more elastic.
• D)incorrect. The statement confuses demand with quantity demanded.

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Definitions:

Brazil

A country in South America known for its vast Amazon rainforest, vibrant culture, and populous cities.

Rio de Janeiro

A major city in Brazil known for its Copacabana and Ipanema beaches, the giant statue of Christ the Redeemer atop Mount Corcovado, and its colorful Carnival festival.

Peripheral Model

A theory in urban sociology suggesting that urban areas are composed of an inner city surrounded by large suburban residential and business areas tied together by a beltway or ring road.

Concentric Zones

A sociological model that divides cities into circular areas with varying social characteristics, originating from the work of Ernest Burgess.