A Specific Tax Will Be Imposed on a Good

question 90

Multiple Choice

A specific tax will be imposed on a good.The supply and demand curves for the good are shown in the diagram below.Given this information,the burden of the tax:

• A)is shared about evenly between consumers and producers.
• B)falls mostly on consumers.
• C)falls mostly on producers.
• D)cannot be determined without more information on the price elasticities of supply and demand.

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Definitions:

Short-term Disability Plan

An insurance program that provides employees with a portion of their income for a limited period when they are unable to work due to illness or injury.

Voluntary Benefit

An optional employee benefit, typically self-paid, that offers additional coverage or services beyond the basic compensation package.

Income Security Benefit

Financial assistance provided by government or private entities to individuals, ensuring a minimum level of income for those who are unemployed, disabled, or retired.

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Additional financial benefits offered to unemployed individuals that supplement their regular unemployment compensation.