Author Question: Goods that are heavily taxed, such as alcohol and cigarettes, often have: a. relatively inelastic ... (Read 51 times)

dakota nelson · **on:** Jun 30, 2018

Goods that are heavily taxed, such as alcohol and cigarettes, often have:
a. relatively inelastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were elastic.
b. relatively elastic demand, such that the tax burden falls primarily on sellers and the deadweight loss associated with the tax is smaller than if demand were inelastic.
c. relatively inelastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were elastic.
d. relatively elastic demand, such that the tax burden falls primarily on buyers and the deadweight loss associated with the tax is smaller than if demand were inelastic.

Question 2

The Phillips curve relationship can also be seen indirectly from the AD/AS model.
a. True
b. False
Indicate whether the statement is true or false