Good a Has a Perfectly Inelastic Demand and an Upward-Sloping

question 3

Multiple Choice

Good A has a perfectly inelastic demand and an upward-sloping supply curve. Good B has a perfectly inelastic supply and a downward-sloping demand curve. If the same sales tax is imposed on the sellers of both good A and good B, the price paid by

• A) buyers of good A rises by more than the price paid by buyers of good B.
• B) buyers of good B rises by more than the price paid by buyers of good A.
• C) buyers of good A rises by the same amount as the price paid by buyers of good B.
• D) More information is needed to determine whether the price paid by buyers of good A rises by more than, less than, or the same amount as the price paid by buyers of good B.

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Definitions:

Closed Class System

A social stratification system where mobility between classes is limited or non-existent, and one's social status is often inherited.

Wealth

An abundance of valuable resources or material possessions.

Inherited

Traits or properties received from previous generations through genetic transmission.

Stratification

The division of society into different levels or classes based on factors such as wealth, power, or prestige.