Those with More Inelastic Demands Will Bear a Larger Burden

question 37

Multiple Choice

Those with more inelastic demands will bear a larger burden of a tax because they:

• A) have more buying power.
• B) have more income.
• C) will switch to other products with a tax.
• D) have fewer substitutes for that good.

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Definitions:

Flexible Budget

A budget that adjusts or varies with changes in volume or activity levels, used for planning and control.

Spending Variance

The difference between the actual amount of money spent and the budgeted amount for a specific period.

Revenue and Spending Variances

involves analyzing the differences between budgeted and actual figures for revenue and expenditures, helping businesses understand financial performance.

Planning Budget

A budget created for a specific level of activity, used as a tool for decision making and planning within an organization.