If elasticity of demand is 1.8, elasticity of supply is 0.2, and a 20 percent excise tax is levied on the good:
A. sellers pay 10 percent of the tax.
B. consumers pay 20 percent of the tax.
C. consumers pay 10 percent of the tax.
D. sellers pay 20 percent of the tax.
Answer: C
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The population theory of Thomas Malthus
(a) would have predicted the changes in per output in this country in the 19th century and up to 1910. (b) would lead you to expect a powerful surge in physical output as the immigration poured in. (c) would not have predicted the positive trend increase in per capita output and income in 1860–1910. (d) does not apply to any of the above.
In the above figure, the total dollar amount of the Medicare subsidies provided by the government is equal to
A) the difference between Ps and P0 multiplied by QM. B) the difference between Ps and Pd multiplied by QM. C) the difference between P0 and Pd multiplied by Qd. D) the difference between Ps and Pd multiplied by Q0.