To Determine the Incidence of a Tax, It Is Necessary

question 240

True/False

To determine the incidence of a tax, it is necessary to have information on both the elasticity of demand and the elasticity of supply.
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Definitions:

Indifference Curves

Graphical representations in microeconomic theory depicting combinations of two goods between which a consumer is indifferent because they provide equal utility.

Bundles

Combinations of goods or services sold as a single package, often at a discounted rate compared to purchasing each item separately.

Indifferent

A state of having no preference between two or more alternatives, reflected in decision-making and consumer choice theory.

Marginal Rate

The marginal rate typically refers to the rate at which the next dollar of taxable income is taxed.