Assume That the Elasticities of Supply and Demand in an Industry

question 112

Multiple Choice

Assume that the elasticities of supply and demand in an industry are both equal to 2 and that it is currently untaxed. A new tax imposed on the industry will:

• A)​be borne more by suppliers than demanders.
• B)​be borne more by demanders than suppliers.
• C)​be borne equally by demanders and suppliers.
• D)​not raise any added revenue for the government since demand is relatively elastic.

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Definitions:

Assertive

Being confidently expressive, self-assured, and capable of standing up for one's own rights or opinions in a respectful manner.

Creative Vision

An individual's ability to imagine or conceptualize innovative ideas, projects, or solutions that are not yet realized.

Four-Temperament Profile

A psychological framework that classifies individuals into four broad personality types: choleric, melancholic, sanguine, and phlegmatic.

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An individual or entity that backs, upholds, or advocates for someone or something.