Economics Chapter 3 Elasticities

Economics Chapter 3 Elasticities

1: Explain how the incidence of an indirect tax depends on the price elasticity of demand and the price elasticity of supply.
2: Using diagrams, explain how the incidence of an indirect tax may be affected by the price elasticity of demand.
3: Explain the factors which might influence of the cross price elasticity of demand between different products.
4: Examine the importance of income elasticity of demand for the producers of primary products, manufactured goods and services.
5: Explain the importance of price elasticity of demand and cross-elasticity of demand for business decision-making.
6: Studies have shown that the demand for tobacco tends to be highly price inelastic. Evaluate the view that governments can best reduce smoking by substantially increasing taxes on cigarettes.

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