Q1. If the government wants to raise money from an excise tax on a consumer goodandwants as much as possible of the tax receipts to be paid by sellers rather than by buyers, the government should impose this tax on a good with a

1. high elasticity of demand and high elasticity of supply
2. low elasticity of demand and low elasticity of supply
3. high elasticity of demand and low elasticity of supply
4. low elasticity of demand and high elasticity of supply

QUESTION 2

Every excise tax causes fewer units of the taxed good or service to be bought and supplied. The reduced production and consumption is identified by economists as the ___ of the tax.

1. deadweight loss
2. elasticity
3. net benefit
4. comparative advantage