Figure 8-15

question 46

Multiple Choice

Figure 8-15
-Refer to Figure 8-15.Panel (a) and Panel (b) each illustrate a $4 tax placed on a market.In comparison to Panel (b) ,Panel (a) illustrates which of the following statements?

• A)When demand is relatively inelastic,the deadweight loss of a tax is smaller than when demand is relatively elastic.
• B)When demand is relatively elastic,the deadweight loss of a tax is larger than when demand is relatively inelastic.
• C)When supply is relatively inelastic,the deadweight loss of a tax is smaller than when supply is relatively elastic.
• D)When supply is relatively elastic,the deadweight loss of a tax is larger than when supply is relatively inelastic.

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Definitions:

Transactional

Occurring simultaneously.

Transactional Messages

Communications focused on facilitating, completing, or confirming a commercial transaction.

Encoded

The process of converting information into a particular form or code, often for the purpose of secrecy, efficiency, or data transmission.

Decoded

Translated or interpreted from a coded or obscure form into a comprehensible or clear form.