Let the Price Elasticity of Supply for a Good Be

question 131

Multiple Choice

Let the price elasticity of supply for a good be 2.0, and the absolute value of the price elasticity of demand be 1.5. Which of the following is TRUE in this case?

• A) Producers carry the majority of the tax burden.
• B) Consumers carry the majority of the tax burden.
• C) Producers and consumers carry an equal amount of the tax burden.
• D) Consumers carry the entire tax burden.

---

Definitions:

International System

A global framework consisting of political, economic, social, and legal rules that govern the relations between nations.

Exchange Rates

The rate at which one currency can be converted into another.

Bretton Woods

Bretton Woods refers to the 1944 international agreement that established fixed foreign exchange rates for major currencies, thereby creating a framework for international trade and financial relations.

World War II

A worldwide war that occurred between 1939 and 1945, engaging the majority of the world's countries, including all major powers, which eventually split into two conflicting military coalitions: the Axis and the Allies.