Figure 8-15

question 46

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 (b) ,Panel (a) 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:

Commercialization

The process of introducing a new product into the market, making it available to consumers largely through advertising and sales strategies.

Leisure

A period of time that can be spent relaxing, engaging in recreation, or otherwise indulging in freely chosen activities.

Recreational Activities

Activities engaged in for enjoyment and relaxation, typically during one's leisure time.

Necessities

Basic needs or essential things that are required for living and maintaining good health, such as food, water, shelter, and clothing.