'Assume That the Demand for Entertainment Is More Elastic Than

question 34

Multiple Choice

'Assume that the demand for entertainment is more elastic than the demand for petrol'.According to this statement, the tax levied on entertainment will cause the loss of consumer surplus to be:

• A)zero
• B)relatively large
• C)relatively small
• D)either small or large (depending on the elasticity of supply)

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Definitions:

Mal-

A prefix in English meaning "bad" or "wrongly."

Micro-

A prefix denoting a factor of one millionth or pertaining to smallness.

Prognosis

A medical term for predicting the likely outcome of an illness or disease.

Thermometer

An instrument used to measure temperature.