4.Which of the following statement sis (are) correct?

(x)If the government removes a tax on a good, then the quantityof the good sold will increase

(y)If the government removes a tax on a good, then the pricepaid by buyers will decrease, and the price received and kept bysellers will increase.

(z)If the government removes a tax on a good, then quantitydemanded for the product will increase as the price moves to alower amount even though demand remained the same.

A.(x), (y) and (z)B. (x) and (y) onlyC.(x) and (z) onlyD.(y) and(z) onlyE.(z) only

5.Which of the following statements is (are) correct?

(x)If the demand curve is perfectly inelastic, then buyers bearthe entire burden of the tax and the price kept by the seller afterthe tax is imposed is the same amount as they kept before the taxwas imposed

(y)If the supply curve is perfectly inelastic, then sellers bearthe entire burden of the tax and the price paid by buyers is thesame after the tax is imposed as the amount buyers paid before thetax was imposed

(z)If the demand curve is perfectly inelastic, then governmentwill not be able to collect any tax revenue since buyers bear theentire burden of the tax.

A.(x), (y) and (z)B. (x) and (y) only C.(x) and (z) onlyD.(y)and (z) onlyE.(y) only

Answer rating: 100% (QA)

Ans 1 Option A x y and z Tax is a fixed amount that is charged on per unit of goods bought and sold in an economy It is levied by the government in or... View the full answer