Absolute Price Elasticities Are Calculated for Four Commodities, and the Values

question 100

Multiple Choice

Absolute price elasticities are calculated for four commodities, and the values are: 0.009; 1.0; 3.3; and 4.1. Which indicates the most price-responsive situation?

• A) 0.009
• B) 1.0
• C) 3.3
• D) 4.1

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Definitions:

Tax Shifting

The process whereby the economic burden of a tax is passed on from one group to another.

Income Tax

A tax levied by governments on individuals or entities based on their income or profits, varying according to earnings levels.

Corporation Income Tax

A tax imposed on the net income of a corporation, calculated based on the company's profit.

Capital Flow

The movement of money for the purpose of investment, trade, or business production, either within a country or internationally.