Use the Figure Below to Answer the Following Question(s)

question 5

Multiple Choice

Use the figure below to answer the following question(s) .
Figure 4-8
-Refer to Figure 4-8. Which of the following is true?

• A) The tax increases the price of soft coal by $40 per ton.
• B) Since the demand for soft coal is more inelastic than the supply, consumers bear most of the burden of the tax.
• C) Since the demand for soft coal is more elastic than the supply, suppliers of soft coal bear most of the burden of the tax.
• D) Since the supply of soft coal is highly inelastic, the primary burden of the tax is imposed on the consumers of soft coal.

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Definitions:

Technological Improvements

Advances or enhancements in technology that increase efficiency, productivity, or utility in various sectors.

Fracking

A method of extracting oil and natural gas from underground rock formations by injecting a mixture of water, sand, and chemicals at high pressure.

Natural Gas Industry

The sector of the economy that involves the exploration, extraction, processing, and selling of natural gas.

Incentives

Rewards or penalties that motivate individuals or entities to act in specific ways.