As Long as There Is Some Substitution Effect in Response

question 47

True/False

As long as there is some substitution effect in response to a change in the relative price of a good,there will be an excess burden from a tax.

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Definitions:

Communication

The process of exchanging information, thoughts, messages, or speeches, either verbally or non-verbally, between two or more parties.

Coercive Power

A form of power that relies on the ability to compel or force someone to comply through threats or punishment.

Effective

The degree to which something is successful in achieving a desired result or outcome.

Short Run

A period in economics during which the quantity and quality of one or more inputs cannot be changed, affecting the immediate production capacity.