Suppose a Tax Is Imposed on Baseball Bats

question 37

Multiple Choice

Suppose a tax is imposed on baseball bats.In which of the following cases will the tax cause the equilibrium quantity of baseball bats to shrink by the smallest amount?

• A)The response of buyers to a change in the price of baseball bats is strong,and the response of sellers to a change in the price of baseball bats is weak.
• B)The response of sellers to a change in the price of baseball bats is strong,and the response of buyers to a change in the price of baseball bats is weak.
• C)The response of buyers and sellers to a change in the price of baseball bats is strong.
• D)The response of buyers and sellers to a change in the price of baseball bats is weak.

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Definitions:

Confounded

A situation in statistical analysis where the effect of one variable on an outcome cannot be separated from the effect of another variable, potentially leading to misleading conclusions.

Biased

Showing an unreasonable like or dislike for a person based on personal opinions.

Response Variable

A variable (often denoted as Y) that represents the outcome or the effect in a study or experiment, influenced by the explanatory variables.

Hydroxyurea

A medication used to treat certain cancers and diseases of the blood, working by slowing or stopping the growth of cancer cells.