A tax on the income from land or other resource with a perfectly inelastic suppl

Question

A tax on the income from land or other resource with a perfectly inelastic supply 0 A is efficient because it does not decrease the equilibrium quantity. has no deadweight loss. is paid entirely by the owner. Answers A, B, and C are correct. Suppose the supply of apartments in Minneapolis is perfectly elastic. The effect of a $100 per month tax on all apartments is that landlords pay none of the tax and there is a surplus of apartments, landlords pay aD of the tax and suffer aD of the deadweight loss. landlords pay all of (he tax and no changes take place in (he quantity of apartments supplied, renters pay all of the tax.

Explanation / Answer

29. D

30. B

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