A Tax Is Imposed on Orange Juice

question 37

Multiple Choice

A tax is imposed on orange juice. Under what circumstances will consumers bear the burden from this tax?

• A) when the supply curve for orange juice is unit elastic
• B) when the supply curve for orange juice is perfectly inelastic
• C) when the demand for orange juice is perfectly inelastic
• D) when the demand for orange juice is perfectly elastic

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Definitions:

Scarce Resources

Resources that are limited in supply and cannot fulfill all the uses and demands placed on them.

Virtually Unlimited

A term used to describe a resource or supply that is so abundant it appears to be almost without limit.

Scarcity and Choice

Refers to the fundamental economic problem of having unlimited human wants in a world of limited resources, leading to the necessity of making choices on how to allocate resources efficiently.

Economic Decision

A choice made by individuals, businesses, or governments that involves the allocation of resources, considering the costs and benefits to optimize outcomes.