Figure 18-2 Figure 18-2 Shows a Demand Curve and Two Sets of Curve

question 213

Multiple Choice

Figure 18-2

Figure 18-2 shows a demand curve and two sets of supply curves, one set more elastic than the other.
-Refer to Figure 18-2.If the government imposes an excise tax of $1.00 on every unit sold, the consumer's burden of the tax

• A)is greater under the more elastic supply curve S₀.
• B)is greater under the less elastic supply curve S₀.
• C)is greater under the less elastic supply curve S₁.
• D)is the same under either supply curve because there is a single demand curve that captures buyers' market behavior.

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Definitions:

Marginal Social Cost

The cost to society of producing one additional unit of a good, including both the cost to the producer and any costs to others from that production.

Marginal Social Benefit

The additional benefit to society resulting from the production or consumption of one more unit of a good or service.

Pollution

The contamination of the natural environment by harmful substances or energies, often resulting from human activities.

Efficient

The condition in which resources are allocated in a way that maximizes the net benefit to society or achieves an optimal outcome where no one can be made better off without making someone else worse off.