Suppose the Demand for Macaroni Is Inelastic and the Supply

question 74

Multiple Choice

Suppose the demand for macaroni is inelastic and the supply of macaroni is elastic,and the demand for cigarettes is inelastic and the supply of cigarettes is elastic.If a tax were levied on the sellers of both of these commodities,we would expect that the

• A) burden of both taxes would fall more heavily on the buyers than on the sellers.
• B) burden of the macaroni tax would fall more heavily on the sellers than on the buyers,and the burden of the cigarette tax would fall more heavily on the buyers than on the sellers.
• C) burden of the macaroni tax would fall more heavily on the buyers than on the sellers,and the burden of the cigarette tax would fall more heavily on the sellers than on the buyers.
• D) burden of both taxes would fall more heavily on the sellers than on the buyers.

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Definitions:

Carrots

Commonly known as a root vegetable, orange in color, and widely used in cooking for its sweet flavor and nutritional value.

Peas

A small green seed or the seed-pod of the Pisum sativum, commonly consumed as a vegetable.

Defend

To protect or uphold against challenge or criticism.

Comparative Advantage

The ability of an individual or country to produce a good or service at a lower opportunity cost than others.