The Demand for Insulin Is Quite Inelastic

question 49

Multiple Choice

The demand for insulin is quite inelastic.The demand for Pepsi is quite elastic.Suppose the elasticity of supply for insulin is the same as the elasticity of supply for Pepsi.If a $0.20 tax was imposed on each of these goods (holding everything else constant) ,which consumers would pay more of the tax?

• A) the Pepsi consumers
• B) the insulin consumers
• C) There would be no difference in the amount of tax paid by the consumers.
• D) More information is needed to determine which consumers pay more of the tax.
• E) The premise of the question is wrong because the elasticity of demand and the incidence of a tax are not related.

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Definitions:

Context

The circumstances, background, or settings that surround and give meaning to an event, idea, or statement.

Behavior

The actions or reactions of an individual or system in response to external or internal stimuli.

Correlational Research

A research design that measures relationships among participants’ measured characteristics, behaviors, and development.

Longitudinal

An approach to research that involves repeated observations of the same variables over short or long periods of time to detect changes.