If the Supply of Automobiles Becomes More Inelastic,then a Tax

question 126

Multiple Choice

If the supply of automobiles becomes more inelastic,then a tax on automobiles is

• A) paid more by the buyers after the change than before.
• B) paid more by the sellers after the change than before.
• C) always split evenly between the buyers and the sellers.
• D) paid more by the government after the change than before.
• E) always paid entirely by the buyers.

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Definitions:

Verifiable

The ability to be tested and proven to be true or accurate, often through the provision of evidence or demonstration.

Consistent

Referring to a principle in accounting that requires the same accounting methods to be applied in the financial statements period over period.

Neutral

A position or stance that does not favor either side in a dispute, competition, or selection.

Information Rehearsal

The mental process of repeatedly going over information in order to remember it.