The demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore,
A) sellers bear most of the incidence of a tax on gasoline.
B) buyers bear most of the incidence of a tax on gasoline.
C) the government bears most of the incidence of a tax on gasoline.
D) the incidence of a tax on gasoline depends if the tax is imposed on sellers or on buyers.
E) None of the above answers is correct.
B
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Total fixed cost
A) increases as output increases. B) does not change as output changes. C) decreases as output increases. D) initially decreases and then increases as output increases.
The above figure depicts the Edgeworth box for two individuals, Al and Bruce. Point a is NOT Pareto efficient because
A) Al's MRS exceeds Bruce's MRS. B) the point is not near the center of the box. C) Al's indifference curve is not far enough away from the origin. D) All of the above.