Suppose a tax is imposed on bananas. In which of the following cases will the tax cause the equilibrium quantity of bananas to shrink by the largest amount?
A) The response of buyers to a change in the price of bananas is strong, and the response of sellers to a change in the price of bananas is weak.
B) The response of sellers to a change in the price of bananas is strong, and the response of buyers to a change in the price of bananas is weak.
C) The response of buyers and sellers to a change in the price of bananas is strong.
D) The response of buyers and sellers to a change in the price of bananas is weak.
Correct Answer:
Verified
Q160: Figure 8-2
The vertical distance between points C
Q161: The size of a tax and the
Q162: Suppose a tax of $5 per unit
Q163: Figure 8-4
Suppose the government imposes a $10
Q164: Figure 8-3
The vertical distance between points A
Q166: Scenario 8-1
Erin would be willing to pay
Q167: Figure 8-4
Suppose the government imposes a $10
Q168: Scenario 8-2
Roland mows Karla's lawn for $25.
Q169: A tax of $0.25 is imposed on
Q170: Scenario 8-1
Erin would be willing to pay
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