Which of the following generalizations about the burden of an excise tax is correct?
a. The more inelastic the supply of a product, the larger the portion of an excise tax will be paid by buyers.
b. The more inelastic the demand for a product, the larger the portion of an excise tax will be paid by buyers.
c. The more elastic the supply of a product, the smaller the portion of an excise tax will be paid by buyers.
d. The burden of an excise tax on a product is independent of the elasticity of the supply and demand for the product on which the tax is levied.
B
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Everything else equal, a decrease in the demand for dollars in exchange for the pesos:
A) will cause the dollars to depreciate against the pesos and will increase the quantity of dollars being traded in the foreign exchange market. B) will cause the dollars to depreciate against the pesos and will decrease the quantity of dollars being traded in the foreign exchange market. C) will cause the dollars to appreciate against the pesos and will decrease the quantity of dollars being traded in the foreign exchange market. D) will cause the dollars to appreciate against the pesos and will increase the quantity of dollars being traded in the foreign exchange market.
Which of the following is NOT present in a perfectly competitive market?
A) profit maximizing firms B) an economic profit in the long run C) price taking behavior D) identical products