Figure 8-15

question 39

Multiple Choice

Figure 8-15
-Refer to Figure 8-15.Panel (a) and Panel (b) each illustrate a $4 tax placed on a market.In comparison to Panel (a) ,Panel (b) illustrates which of the following statements?

• A)When demand is relatively inelastic,the deadweight loss of a tax is smaller than when demand is relatively elastic.
• B)When demand is relatively elastic,the deadweight loss of a tax is larger than when demand is relatively inelastic.
• C)When supply is relatively inelastic,the deadweight loss of a tax is smaller than when supply is relatively elastic.
• D)When supply is relatively elastic,the deadweight loss of a tax is larger than when supply is relatively inelastic.

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Definitions:

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Means-End Analysis

A problem-solving strategy that involves breaking down the problem into smaller parts and addressing these parts to reach the desired goal.

Stroop Task

The Stroop task is a psychological test that demonstrates the conflict between the meaning of words and their colors, revealing how automatic processing can interfere with intended cognitive tasks.

Highly Learned Skills

Abilities or competencies developed to a high level of proficiency through extensive practice and learning.