Why Could the Discovery of a New Hybrid Wheat Lower

question 148

Multiple Choice

Why could the discovery of a new hybrid wheat lower farmers' revenue

• A)because the demand for wheat is inelastic
• B)because the demand for wheat is elastic
• C)because the supply of wheat is elastic
• D)because the supply of wheat is inelastic

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Definitions:

Lump-Sum Tax

A tax that is a fixed amount, not varying with the taxpayer’s income level or expenditure, making it independent of the taxpayer’s behavior.

Excise Tax

An excise tax is a tax charged on specific goods and services, such as gasoline, cigarettes, and alcohol, typically to discourage their use or generate revenue.

Benefits Principle

A taxation theory that suggests taxes should be levied according to the benefits received by the taxpayer from government services.

Ability-To-Pay Principle

This principle suggests that individuals should be taxed based on their ability to pay, regardless of the benefits they receive.