The Larger the Share of a Good in a Consumer's

question 163

Multiple Choice

The larger the share of a good in a consumer's budget, holding everything else constant, the

• A)more price elastic is a consumer's demand.
• B)more vertical is a consumer's demand curve.
• C)more price inelastic is a consumer's demand.
• D)more unit elastic is a consumer's demand.

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Definitions:

Deadweight Loss

A decrease in economic efficiency due to the failure to achieve or the impossibility of achieving equilibrium for a good or service.

Price-Elastic

Describes a good's demand sensitivity to changes in price; high elasticity indicates demand is highly responsive to price changes.

Excise Tax

A tax paid on specific goods and services, such as tobacco and gasoline, usually levied at the point of manufacture or sale.

Tax Revenue

The revenue governments obtain from imposing taxes.