Suppose That Government Imposes a Specific Excise Tax on Product

question 214

Multiple Choice

Suppose that government imposes a specific excise tax on product X of $2 per unit and that the price elasticity of supply of X is unitary (coefficient = 1) . If the incidence of the tax is such that the producers of X pay $1.9 of the tax and the consumers pay $0.1, we can conclude that the

• A)supply of X is inelastic.
• B)demand for X is unitary elastic.
• C)demand for X is inelastic.
• D)demand for X is elastic.

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Definitions:

Gradually

A progression in small stages or degrees over time.

Exposure

Refers to the state of being subjected to contact with something (e.g., a new environment, a language, or a type of learning material), often leading to increased familiarity or acquiring new skills.

Object of the Phobia

The specific subject or situation that triggers an irrational and excessive fear in an individual suffering from a phobia.

Shaping Procedure

A method of training by which successive approximations toward a target behavior are reinforced.