Suppose That a Tax Is Placed on Books

question 200

Multiple Choice

Suppose that a tax is placed on books.If the buyer pays the majority of the tax,what do we know

• A)The supply curve is more inelastic than the demand curve.
• B)The demand curve is more inelastic than the supply curve.
• C)The government has placed the tax on the seller.
• D)The government has placed the tax on the buyer.

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Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Gambler's Fallacy

The erroneous belief that if a particular event occurs more frequently than normal during the past, it is less likely to happen in the future, or vice versa, in situations that are truly random.

Ignoring Base Rates

Ignoring base rates is a cognitive bias that involves disregarding or underestimating general information (base rates) in favor of specific individual information when making decisions or judgments.

Availability Bias

A cognitive bias that causes people to overestimate the likelihood of events based on their availability in memory, often leading to skewed decision-making.