The buyer will pay the entire tax levied on a good when the demand for the good is ________ or when the supply of the good is ________
A) perfectly elastic; perfectly inelastic
B) perfectly elastic; perfectly elastic
C) perfectly inelastic; perfectly inelastic
D) perfectly inelastic; perfectly elastic
E) unit elastic; unit elastic
D
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On a time-series graph with a ratio scale
A) the slope of the line is negative when the level of the variable is rising. B) the same distance along the vertical axis measures different amounts of the variable. C) time is plotted on the vertical axis rather than the horizontal axis. D) it is impossible to determine a trend.
The figure above shows the market for tickets to the Super Bowl the day of the game. Suppose the government imposes an entertainment tax of $100 per ticket
a) What is the equilibrium price of a Super Bowl ticket before the tax? What is the price paid by buyers after the tax? What is the price received by sellers after the tax? b) What is the equilibrium quantity of tickets before the tax? What is the equilibrium quantity after the tax? c) Do buyers or sellers bear the largest incidence of the tax?