Suppose the Price Elasticity of Demand for Yachts Equals 4

question 10

Multiple Choice

Suppose the price elasticity of demand for yachts equals 4.04, while the price elasticity of supply for yachts equals 0.22. If Congress reinstates a luxury tax on yachts, who will pay more of the tax?

• A) Yacht builders will pay more.
• B) Yacht buyers will pay more.
• C) Yacht builders and buyers will pay equally.
• D) It's impossible to tell without additional information.

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Definitions:

Serotonin

A neurotransmitter that is involved in the responsiveness of the medulla, emotional responses such as depression, and motivational responses such as hunger.

Conduct Disorder

A repetitive and persistent pattern of behavior in children and adolescents that violates the rights of others or major societal norms.

Physical Harm

Injury or damage to an individual's body resulting from accidents, violence, or other physical impact.

Defiant

Showing resistance or disobedience against authority or challenging the norms; often used to describe rebellious behavior in children or adolescents.