Suppose the Elasticity of Supply of Land Is 0 and Elasticity

question 29

Multiple Choice

Suppose the elasticity of supply of land is 0 and elasticity of demand is 2.If the government imposes a 10 percent tax on land,then

• A) buyers and sellers each pay 5 percent of the tax.
• B) buyers pay all of the tax.
• C) sellers pay all of the tax.
• D) sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax.
• E) buyers pay 1/2 of the tax.

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Definitions:

Self-serving Bias

A cognitive bias leading individuals to attribute their successes to internal factors while blaming external factors for their failures.

Behaviour

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

Interpersonal Communication

The process by which individuals exchange information, feelings, and meaning through verbal and non-verbal messages, typically in a face-to-face setting.

Perception

The process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment.