The burden of a tax falls entirely on buyers if the price elasticity of demand i

Question

The burden of a tax falls entirely on buyers if the price elasticity of demand is greater than 1 the price elasticity of supply is unitary elastic the price elasticity of demand is zero (perfectly inelastic) the income elasticity of demand is high Which of the following will cause an inward shift of the production possibilities curve of an economy? A decrease in the demand for goods and services An increase in the opportunity cost of the goods being produced A decline in the size of the labor force Introduction of better technology The entry of new firms into a perfectly competitive market will cause: the equilibrium price to increase but the equilibrium quantity to decrease. the equilibrium price to decrease but the equilibrium quantity to increase. both the equilibrium price and quantity to decrease. both the equilibrium price and quantity to increase.

Explanation / Answer

48. C, because even if the increased price does not impact on sales, producers show interest to increase on prices. there are many examples for this like petrol, diesel and gas etc

28. A, because when the demand for goods and services comes down, it leads to decreasing the production possibility curve

.18. B, because when the number of firms increased it leads to price war and each one tries to decrease his price, and because of decrease in price the demand will goes up to the product/service.

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