Suppose a Tax Is Imposed on Baseball Bats

question 37

Multiple Choice

Suppose a tax is imposed on baseball bats.In which of the following cases will the tax cause the equilibrium quantity of baseball bats to shrink by the smallest amount?

• A)The response of buyers to a change in the price of baseball bats is strong,and the response of sellers to a change in the price of baseball bats is weak.
• B)The response of sellers to a change in the price of baseball bats is strong,and the response of buyers to a change in the price of baseball bats is weak.
• C)The response of buyers and sellers to a change in the price of baseball bats is strong.
• D)The response of buyers and sellers to a change in the price of baseball bats is weak.

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Definitions:

Time-Driven Activity-Based Costing

An approach to activity-based costing that assigns resource costs directly to products or services based on the estimated time required for each activity.

Customer Service Department

A division within a company that handles inquiries, complaints, and support requests from customers.

Capacity Analysis

Calculating the production capacity an organization needs to fulfill the dynamic demands for its products.

Time-Driven

A method or approach that bases calculations, actions, or operations on the passage of time, often used in costing and scheduling.