The More Inelastic Is Demand,ceteris Paribus

question 179

Multiple Choice

The more inelastic is demand,ceteris paribus:

• A) the larger the welfare cost of a given tax.
• B) the larger the proportion of the burden of a given tax borne by the sellers.
• C) the larger the proportion of the burden of a given tax borne by the buyers.
• D) the smaller amount of revenue generated by the tax.

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Definitions:

External Variables

Factors outside of an individual's immediate control that can impact outcomes or behaviors.

Human Nature

The inherent characteristics, including ways of thinking, feeling, and acting, that all humans tend to have naturally, irrespective of societal influence.

Self-control Techniques

Methods or strategies used by individuals to regulate their thoughts, feelings, and actions to achieve personal goals or adhere to societal expectations.

Satiation

Refers to the state of being satisfied to the full, often used in the context of eating until one feels full, but can also refer to other experiences of fulfillment.