Question

11. What type of goods would you recommend that the government tax if it wants the tax to result in no deadweight loss?

Group of answer choices

Unit elastic good with a price elasticity of demand and supply as close to 1 as possible

Inelastic goods with a price elasticity of demand and supply as close to zero as possible

Inelastic goods with a price elasticity of demand and supply as close to infinity as possible

Elastic goods with a price elasticity of demand and supply as high as possible

12.

What type of goods would you recommend that the government tax if it wants the tax to result in no deadweight loss?

Group of answer choices

Unit elastic good with a price elasticity of demand and supply as close to 1 as possible

Inelastic goods with a price elasticity of demand and supply as close to zero as possible

Inelastic goods with a price elasticity of demand and supply as close to infinity as possible

Elastic goods with a price elasticity of demand and supply as high as possible

13.

The demand for wiggles is elastic, implying that a tax on this commodity

Group of answer choices

would be paid mostly by the buyers

would be even split between buyers and sellers

would be paid by whoever the government placed the tax on.

would be paid mostly by the sellers

14. Not having to pay for a good leads to

Group of answer choices

under-consumption

over-consumption

over production

under production

Answer 1

Answer 11 and 12.

Inelastic goods with a price elasticity of demand and supply as close to zero as possible

Reason- The more inelastic the good is more will be the tax burden and less will the quantity reduce due to tax. So the Deadweight loss will be zero. When elasticity is 0 it means there is no change in quantity due to change in price. So even when price rises due to tax, quantity will not fail and there will be no Deadweight loss.

Answer 13. would be paid mostly by the sellers

Reason- the more elastic the curve is, less will be the tax burden. Since demand curve is more elastic, the fall in quantity demanded will be more than the rise in prices after tax. So conauemrs will bear less burden than sellers.

Answer 14. over Consumption

Reason- Free rider problem orrucs when a good can be consumed witbout oaying for it. It leads to over Consumption by the consumers and under production by the sellers.