If the Demand Curve for a Good Is Unit Price

question 81

Multiple Choice

If the demand curve for a good is unit price elastic and the supply curve is perfectly price elastic,a $1 specific tax imposed on the sellers of this good will

• A) shift the supply curve up vertically by $1.
• B) shift the demand curve down vertically by $1.
• C) not raise price at all.
• D) cause price to increase but by less than $1.

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Definitions:

Economic Growth

An increase in the production of goods and services in an economy over a period of time, reflecting an improvement in the standard of living.

General Obligation Bond

A municipal bond backed by the full faith and credit of the issuing authority, with repayment guaranteed by the authority's ability to tax.

Revenue Bond

A type of municipal bond supported by the revenue from a specific project, like a toll road or public utility, rather than from tax revenue.

Secured Bond

A type of bond backed by the issuer's assets, providing a safeguard to bondholders by promising specific collateral in case of default.