Figure 8-14

-Refer to Figure 8-14.Panel (a)and Panel (b)each illustrate a $2 tax placed on a market.In comparison to Panel (b),Panel (a)illustrates which of the following statements?
A) When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic.
B) When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic.
C) When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic.
D) When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.

Question

Figure 8-14

-Refer to Figure 8-14.Panel (a)and Panel (b)each illustrate a $2 tax placed on a market.In comparison to Panel (b),Panel (a)illustrates which of the following statements?
A) When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic. 
B) When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic. 
C) When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic. 
D) When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.

Quizplus · Accepted Answer

The Answer of Figure 8-14

-Refer to Figure 8-14.Panel (a)and Panel (b)each illustrate a $2 tax placed on a market.In comparison to Panel (b),Panel (a)illustrates which of the following statements?
A) When demand is relatively inelastic, the deadweight loss of a tax is smaller than when demand is relatively elastic. 
B) When demand is relatively elastic, the deadweight loss of a tax is larger than when demand is relatively inelastic. 
C) When supply is relatively inelastic, the deadweight loss of a tax is smaller than when supply is relatively elastic. 
D) When supply is relatively elastic, the deadweight loss of a tax is larger than when supply is relatively inelastic.

Figure 8-14 -Refer to Figure 8-14.Panel (A)and Panel (B)each Illustrate a $2