If Neither the Demand nor Supply of a Good Is

question 134

Multiple Choice

If neither the demand nor supply of a good is perfectly elastic or inelastic,a tax on the good ________ consumer surplus and ________ producer surplus.

• A) decreases; decreases
• B) increases; increases
• C) decreases; increases
• D) increases; decreases
• E) decreases; does not change

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Definitions:

Rate of Return

A financial return or shortfall on an investment, indicated as a percentage of its initial value.

Short 300 Shares

A trading strategy where an investor borrows 300 shares from a broker and sells them on the open market, planning to buy them back later at a lower price.

Initial Margin

The minimum amount of equity required to open a new position in a margin account, set by the broker.

Common Stock

A type of security that represents ownership in a corporation, giving shareholders voting rights and potential dividends.