A is correct
When demand is perfectly inelastic, increase in price does not lead to decrease in quantity demanded. Thus burden of tax is borne by consumers only when demand is perfectly inelastic.
Thus price paid by consumers increases by 9.
21. Suppose the government imposes a S9 per unit tax on the production of Good Z....
50. National defense and cbooks are similar in that both are while ebooks are not. but they differ in that national defense is A) nonexcludable; nonrival in consumption B) excludable; rival in consumption C) rival in consumption; excludable D) nonrival in consumption; nonexcludable 21. Suppose the government imposes a S9 per unit tax on the production of Good Z. If the demand curve for Good Z is perfectly inelastic and the supply curve is upward-sloping, the price that consumers pay...
Suppose the government imposes a tax on each case of beer. The consumers will pay the majority of tax when demand is: a. perfectly elastic b. unit elastic. 24. c. elastic d. inelastic e. none of the above. Producers always pay the majority of taxes. A perfectly elastic demand curve is represented by a curve that is a. downward sloping to the right. b. upward sloping to the right c. vertical d. almost vertical e. horizontal 25. Country A is...
Hats are produced in a perfectly competitive industry, and the government imposes a per-unit sales tax on hats. (a) Using the labeling from the graph, identify each of the following. (i) The after-tax price paid by consumers and the after-tax quantity (ii) The area representing the total tax revenue received by the government (b) Now assume instead that the demand for hats is perfectly inelastic at Q3, while the supply and the per-unit tax remain unchanged. (i) Will the after-tax...
In a competitive market with a linear upward-sloping supply curve and a linear downward-sloping demand curve, the government imposes a $10 tax per unit bought and sold. The tax causes the equilibrium quantity to fall from 113 units to 101 units. The deadweight loss of this tax is $______
1.Suppose that good ABC is a neutral good for Leah. If Leah's income rises, then the result will be that Leah's demand curve for good ABC will a.shift rightward. b.shift leftward. c.not shift at all. d.shift rightward immediately and then shift leftward. ( I chose option A) 2. Which of the following illustrates the law of supply? a.Company ABC increases the quantity supplied of its product as the price of that product rises. b.Company ABC decreases the quantity supplied of...
When a government imposes a price ceiling below the market price on a product or service, which of the following happens? a.Total consumer surplus rises because consumers now pay less for the product b.The total amount of the product or service that is traded in the market rises due to the lower price c.A shortage of supply relative to demand results A per unit tax on a good which is levied on the consumer will usually cause which of the...
Suppose that the government imposes a $10 tax on sellers of Humbugs. The pre-tax price of Humbugs was $50. If, at the original equilibrium price, the elasticity of demand was 2 and the elasticity of supply was 15, which of the following is true? The equilibrium quantity of Humbugs will not change. The full amount of the tax will be paid by buyers. Sellers will pay relatively more of the tax than buyers. Buyers will pay relatively more of the...
Refer to Figure: Supply and Demand Suppose the government imposes a tax of $6 on consumers. Which statement is correct? a. Consumers will pay $16, the producer will receive $10, and total surplus decreases by $6. b. Consumers will pay $14, the producer will receive $8, and total surplus decreases by $6. c. Consumers will pay $14, the producer will receive $8, and total surplus decreases by $24. d. Consumers will pay $16, the producer will receive $10, and total...
4. Suppose the price elasticity of demand for Good X is zero. Government imposes a unit tax on the sellers of this product. Does this tax policy result in a Dead-Weight-Loss to the society? Explain your answer?
QUESTION 11 An advance in technology in the production of good X causes a. a leftward shift in the supply curve for good X. b. the supply curve for good X to change from vertical to upward sloping, c. the supply curve for good X to change from upward sloping to vertical. d. a rightward shift in the supply curve for good X. QUESTION 13 -- you incur an Every time you make a a. competitive move; price b. decision;...