If the Elasticity of Demand Is 2 in Absolute Value

question 37

Multiple Choice

If the elasticity of demand is 2 in absolute value, and the elasticity of supply is 1 in absolute value, how much of a tax burden will the buyer bear relative to the seller?

• A) The buyer will bear more of the tax burden than will the seller.
• B) The seller will bear more of the tax burden than will the buyer.
• C) The buyer and seller will share the tax burden equally.
• D) The buyer will not bear none of the tax burden since demand curve is twice as elastic as supply.

---

Definitions:

Small Households

Living arrangements involving fewer individuals, often reflecting changes in society such as increased individualism or declining family sizes.

Slaves

Individuals forced into servitude, deprived of personal freedom and the right to make their own life choices, often under harsh conditions.

Autonomy

The ability or right of an entity, especially a region or organization, to govern itself independently.

Owners

Individuals or entities that hold legal title to an object, property, or business, giving them certain rights such as usage, control, and the ability to transfer ownership.