Suppose a Tax of $1 Per Unit Is Imposed on a Good.The

question 13

Multiple Choice

Suppose a tax of $1 per unit is imposed on a good.The more elastic the demand for the good,other things equal,

• A)the larger is the decrease in quantity demanded as a result of the tax.
• B)the smaller is the tax burden on buyers relative to the tax burden on sellers.
• C)the larger is the deadweight loss of the tax.
• D)All of the above are correct.

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Definitions:

Units-of-Activity Method

A depreciation method that allocates the cost of an asset over its useful life based on units of production or usage rather than time.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, representing how much of the asset's value has been used up during the period.

Straight-Line Method

A technique for estimating an asset's depreciation, where it's presumed the asset depreciates uniformly each year throughout its productive lifespan.

Delivery Equipment

This refers to the machinery and vehicles used for the purpose of transporting goods to customers.