The Elasticity of Supply of Capital Is Larger Than the Elasticity

question 72

Multiple Choice

The elasticity of supply of capital is larger than the elasticity of supply of land,so a tax on capital income has ________ deadweight loss and a ________ effect on the equilibrium quantity than does an equal tax on land.

• A) a larger; larger
• B) a larger; smaller
• C) a smaller; larger
• D) a smaller; smaller
• E) no; smaller

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