27. Rising prices help control the process of resource depletion by a. discourag
ID: 1213889 • Letter: 2
Question
27. Rising prices help control the process of resource depletion by
a.
discouraging consumption and waste.
b.
stimulating more efficient use of the depletable resource.
c.
encouraging resource-saving innovation.
d.
doing all of the above.
____ 28. Rising prices for a natural resource stimulate
a.
the development of complements for the resource.
b.
the development of substitutes for the resource.
c.
the development of externalities from the resource.
d.
All of the above are correct.
____ 29. Taxes on sales of liquor, tobacco, gasoline and non-essentials are examples of
a.
direct taxes.
b.
excise taxes.
c.
progressive taxation.
d.
loopholes.
____ 30. The incidence of a tax refers to
a.
who actually collects the tax.
b.
how frequently the tax is collected.
c.
who bears the economic burden of the tax.
d.
how the tax affects prices or wages.
a.
discouraging consumption and waste.
b.
stimulating more efficient use of the depletable resource.
c.
encouraging resource-saving innovation.
d.
doing all of the above.
Explanation / Answer
27. d) doing all of the above.
28. b) the development of substitutes for the resource. Increase in Price decreases demand for natural resources and people start looking for substitutes.
29. b) excise taxes. It is tax on production, transportation and sale of these goods.
30. c) who bears the economic burden of the tax.
30. c) who bears the economic burden of the tax.
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