When a Per Unit Tax Is Imposed on an Industry

question 6

Multiple Choice

When a per unit tax is imposed on an industry where the supply curve is perfectly elastic:

• A)consumers and producers share the tax.
• B)consumers pay the full amount of the tax.
• C)innovation is discouraged in that industry.
• D)producers pay the full amount of the tax.

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Definitions:

Alternative Hypotheses

A statement in hypothesis testing that is directly opposed to the null hypothesis, suggesting there is statistical evidence of an effect.

Weight Loss Strategy

A plan or approach designed to achieve a reduction in body weight, typically involving diet, exercise, or other lifestyle changes.

P-Value

In hypothesis testing, the probability of observing the test results, or more extreme results, if the null hypothesis is true, used to determine statistical significance.

Null Hypothesis

A statistical hypothesis that suggests there is no significant difference between specified populations, any observed difference being due to sampling or experimental error.