How Can We Anticipate the Proportion of a Newly Imposed

question 76

Multiple Choice

How can we anticipate the proportion of a newly imposed unit excise tax that consumers will pay?

• A) Consumers will pay most of the tax whenever their demand for a product is relatively unresponsive to price changes.
• B) Consumers will always pay 100 percent of an excise tax.
• C) Consumers will pay most of the tax whenever their demand for the product is very price sensitive.
• D) Since producers always pay 100 percent of an excise tax, we know consumers will not pay any of the tax.

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Definitions:

Buffering

The process by which pH is regulated and maintained within living organisms, preventing harmful shifts in acidity or alkalinity.

Ammonia

A compound of nitrogen and hydrogen (NH3) that is a colorless gas with a pungent smell, used widely in industry and produced naturally in the body as a byproduct of amino acid metabolism.

Bicarbonate Ions

A negatively charged ion that acts as a significant component of the bicarbonate buffer system, helping to maintain pH balance in blood and other bodily fluids.

Phosphate Ions

Negatively charged ions (PO4^3-) that play crucial roles in biological processes such as energy transfer and cellular regulation.