If the Elasticity of Supply of TV Sets Is Equal

question 86

Multiple Choice

If the elasticity of supply of TV sets is equal to 3, then a 10 per cent increase in the price of a TV will

• A) decrease the quantity supplied by 30.0 per cent.
• B) increase the quantity supplied by 30.0 per cent.
• C) increase the quantity supplied by 3.33 per cent.
• D) increase the quantity supplied by 0.33 per cent.

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Definitions:

Tax Level

The rate at which income, corporate profits, or other assets are taxed by the government.

Zero-coupon Bonds

Fixed-income securities issued at a discount and repaid at face value but do not offer interest payments through their life.

Tax-sheltered Retirement Plans

Retirement savings plans that provide tax advantages to the saver, often by allowing pre-tax contributions or tax-free growth.

Tax Bill

The total amount of tax owed by an individual or corporation to a taxing authority, after all deductions, credits, and exemptions.