'Assume That the Supply of Forest Products Is Relatively Inelastic

question 32

Multiple Choice

'Assume that the supply of forest products is relatively inelastic and the supply of coffee is relatively elastic'.According to this statement, a tax levied on coffee will cause the loss of producer surplus to be:

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

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Definitions:

Neurons

Specialized cells in the nervous system that transmit information through electrical and chemical signals.

Negative Feedback System

A regulatory mechanism in which a change in a system's output acts to stabilize or reduce further change.

Positive Feedback System

A system in which a change in some steady state triggers a response that intensifies the changing condition. Compare with negative feedback system.

Set Point

A theory suggesting that the body regulates physiological functions, such as temperature or weight, around a specific homeostasis level or 'set point'.