If the Elasticity of Supply Is 1, and the Elasticity

question 65

Multiple Choice

If the elasticity of supply is 1, and the elasticity of demand is 3(in absolute value) , then for a tax of $1 buyers will pay:

• A)an extra 25 cents and sellers will receive 75 cents less.(True Answer )Correct
• B)an extra 75 cents and sellers will receive 25 cents less.
• C)an extra 50 cents and sellers will receive 50 cents less.
• D)nothing extra since this is the special case where demand is unit elastic.

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Definitions:

Ottonian Empire

A period in medieval Germany, roughly from 919 to 1024, characterized by the reign of the Ottonian dynasty which was noted for its consolidation of the kingdom and significant contributions to art and architecture.

Monasteries

Religious communities where monks or nuns live, work, and worship, often secluded from secular society and dedicating their lives to religious practice.

Gospel Book of Otto III

A medieval illuminated manuscript, richly decorated, which depicts the Gospel. It is associated with Emperor Otto III.

Ottonian Court

The Ottonian court refers to the court and culture surrounding the rulers of the Ottonian dynasty, which led the Holy Roman Empire from 919 to 1024, noted for fostering art, architecture, and scholarship.