demand and supply elasticity. Q1. Which of the following statements is most accurate with respect to the effects of taxes imposed on goods and services? A) The actual incidence will fall more heavily on the seller if the supply is less elastic relative to demand. B) The actual incidence will fall more heavily on the buyer if the demand is more elastic relative to supply. C) The statutory incidence will fall more heavily on the buyer if the supply is less elastic relative to demand.
Q2. Arthur Hampton is reviewing the transcript of a lawmaking session during which a legislator made the following two statements: Statement 1: The impact of a tax on the equilibrium price and quantity of a good or service will be the same whether the tax is legally imposed on the buyers or sellers. Statement 2: The impact on the equilibrium price and quantity of a good or service of making trade in it illegal will be the same whether the penalty is imposed on the buyers or sellers. With respect to these statements: A) only statement 1 is correct. B) both are correct. C) only statement 2 is correct.
Q3. The decrease in production and trade as a result of a tax is called: A) total tax incidence. B) statutory incidence. C) deadweight loss. | 
发表于 2008-12-31 10:18
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