The case of a tax over shifting (i.e., that the price after tax increases by more than the tax) A) is only possible in the case of perfect competition and a perfectly elastic demand curve. B) is only possible in the case of perfect competition and an inelastic demand curve. C) is only possible in the case of perfect competition and a vertical demand curve. D) is impossible with perfect competition, irrelevant of the elasticities In a two-period life cycle model, the intertemporal budget constraint has a kink if A) interest payments cannot be deducted but interest receipts are taxable.
The case of a tax over shifting (i.e., that the price after tax increases by more than the tax) A) is only possible in the case of perfect competition and a perfectly elastic demand curve. B) is only possible in the case of perfect competition and an inelastic demand curve. C) is only possible in the case of perfect competition and a vertical demand curve. D) is impossible with perfect competition, irrelevant of the elasticities In a two-period life cycle model, the intertemporal budget constraint has a kink if A) interest payments cannot be deducted but interest receipts are taxable.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The case of a tax over shifting (i.e., that the
A) is only possible in the case of
B) is only possible in the case of perfect competition and an
C) is only possible in the case of perfect competition and a vertical demand curve.
D) is impossible with perfect competition, irrelevant of the elasticities
In a two-period life cycle model, the intertemporal budget constraint has a kink if
A) interest payments cannot be deducted but interest receipts are taxable.
B) interest payments can be deducted but interest receipts are not taxable.
C) all of the above.
D) none of the above.
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