The More Inelastic the Demand for a Product, the More

question 5

Multiple Choice

The more inelastic the demand for a product, the more the actual burden of a tax on the product will:

• A) fall on sellers.
• B) fall on buyers.
• C) fall equally on both buyers and sellers.
• D) create a larger deadweight loss (or excess burden).

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Definitions:

Groupthink

A psychological phenomenon that occurs within a group of people in which the desire for harmony in decision-making results in an irrational or dysfunctional outcome.

Group Polarization

The tendency of a group to make decisions that are more extreme than the initial inclination of its members.

Risky Shift

A phenomenon in group decision-making processes where groups tend to make riskier decisions compared to individuals.

Non-Directive Group Leader

A leader who takes a passive role, encouraging group members to lead discussions and make decisions, thereby fostering autonomy and self-direction.