Assume we have a unit tax of 10%. If the seller is able to shift the complete burden of the tax to the buyer, without decreasing the pre-tax price of the good, demand for the good is likely Select one: a. very inelastic. b. very elastic. c. unit elastic.
Please solve q.1 , q.2 , q.3
All 3 questions please if you can't please skip.
Q.1 Assume we have a unit tax of 10%. If the seller is able to shift the complete burden of the tax to the buyer, without decreasing the pre-tax
Select one:
a. very inelastic.
b. very elastic.
c. unit elastic.
Q.2 Which two pairs of goods likely have a relatively weak negative cross price elasticity for most people?
Select one:
a. Peanut butter and computers.
b. Sprite and Coca Cola.
c. Sausages and ketchup.
d. Beef and fish.
e. chocolate milk and skim milk.
Q.3 If a product has many substitutes, which of the following statements is correct?
Select one:
a.It is likely that its cross price elasticity is close to -3.
b. It is likely that it is a normal good.
c. It is likely that its supply elasticity is low.
d. It is likely that its
e. None of the above.
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