1.Suppose supply is not perfectly inelastic. If demand becomes more inelastic, does the tax burden on buyers increase or decrease? Does DWL increase or decrease?

2.(Choose one alternative that best completes the statement)

The government wants to raise taxes while generating no deadweight loss. Furthermore, the government wants the sellers to bear all the tax burden. The government should raise taxes on a good with a _____.

a.perfectly elastic demand. d.perfectly inelastic supply.

b.perfectly elastic supply.e.perfectly inelastic demand.

c.somewhat elastic demand.

Demand for good A is perfectly inelastic. Suppose that supply of good A increases. Does CS increase or decrease? Does PS increase or decrease?

Market for good B:

Demand: Qd = 2,500 - 5P

Supply: Qs = -800 + 10P

Suppose a price floor of $250 is imposed. Calculate the amount of surplus.