If the Demand for Good X Is Perfectly Inelastic and a Tax

question 186

Multiple Choice

If the demand for good X is perfectly inelastic and a tax is levied on the producers of each unit:

• A)consumers pay the entire tax,and deadweight loss will occur because the equilibrium quantity of good X falls.
• B)consumers pay the entire tax,and there is no deadweight loss because the equilibrium quantity of good X remains constant.
• C)consumers and producers share the burden of the tax,and there is no deadweight loss because the equilibrium quantity of good X remains constant.
• D)producers pay the entire tax,and deadweight loss will occur because the equilibrium quantity of good X falls.

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Definitions:

Active Transport

The movement of a substance across a cell membrane from an area of low concentration to an area of high concentration.

Passive Mechanisms

Processes that occur without the input of energy, such as osmosis or diffusion, often in biological contexts.

Nucleic Acids

Biological molecules essential for life, including DNA and RNA, that carry genetic information in cells.

Carbohydrates

Organic compounds, including sugars, starches, and cellulose, which are an important source of energy for living organisms.