Assume That the Demand for Salt Is Relatively Inelastic and the Demand

question 54

Multiple Choice

Assume that the demand for salt is relatively inelastic and the demand for orange juice is relatively elastic.Compared to the deadweight loss from the same percentage tax on orange juice, the deadweight loss from imposing a tax on salt would be:

• A)greater
• B)lesser
• C)neither greater nor lesser
• D)either greater or lesser

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Definitions:

Lithium Carbonate

A chemical compound used as a mood stabilizer in the treatment of bipolar disorder and other psychiatric conditions.

Tranquilizer

A drug used to reduce tension or anxiety, often by depressing nervous system activity.

First-Generation Neuroleptic

A class of antipsychotic drugs developed in the 1950s, used primarily to treat schizophrenia and other severe mental disorders.

Thorazine

A medication primarily used to treat psychotic disorders such as schizophrenia, known chemically as chlorpromazine.