Explain the concepts of price elasticity of demand and supply. What are the implications of inelastic demand for tax burden, and how does an increase in income tax affect consumer spending?

$P_1 = 500 \text{frs CFA}$
$P_2 = 650 \text{frs CFA}$
$Q_1 = 950 \text{ packets}$
$Q_2 = 1400 \text{ packets}$

Rounding to two decimal places, the elasticity of supply is approximately 1.58.

• C) $\boxed{\text{1.58}}$

$P_{C1} = 3,000,000$ (initial price of cars)
$P_{C2} = 2,300,000$ (new price of cars)
$Q_{P1} = 1800 \text{ litres}$ (initial quantity of petrol demanded)
$Q_{P2} = 2600 \text{ litres}$ (new quantity of petrol demanded)

Rounding to one decimal place, the cross elasticity of demand for petrol is approximately -1.9. The negative sign indicates that cars and petrol are complementary goods.

• D) $\boxed{\text{-1.9}}$

$P_1 = 250 \text{frs CFA}$
$P_2 = 300 \text{frs CFA}$
$Q_1 = 1100 \text{ loaves}$
$Q_2 = 800 \text{ loaves}$

Rounding to two decimal places, the PED is approximately 1.36.

• C) $\boxed{\text{1.36}}$

Question 37: When businessmen intentionally hold back goods from the market in anticipation of higher future prices, they are creating a situation where the supply is artificially restricted. This is known as artificial scarcity.

• D) Artificial scarcity