The Incidence of a Per-Unit Tax on a Good Is

question 97

Multiple Choice

The incidence of a per-unit tax on a good is identical for buyers and sellers of the good if ________.

• A) the buyers and sellers of the good are equally sensitive to price changes
• B) the elasticity of market demand exceeds the elasticity of market supply
• C) the market supply curve is flatter than the market demand curve
• D) the market demand curve is horizontal

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Definitions:

Financial Markets

Platforms or environments where buyers and sellers trade financial securities, commodities, and other fungible items of value.

Behavioral Finance

Behavioral Finance studies how psychological influences and biases affect the financial behaviors of investors and financial practitioners.

Vanguard 500 Index Fund

The Vanguard 500 Index Fund is a mutual fund providing investors with exposure to 500 of the largest U.S. companies, mirroring the performance of the S&P 500 Index.

Arbitrage

Arbitrage refers to the practice of buying and selling an identical asset across diverse markets simultaneously to capitalize on differing prices.