Which of the Following Is Correct Concerning the Burden of a Tax

question 151

Multiple Choice

Which of the following is correct concerning the burden of a tax imposed on coffee mugs?

• A) Buyers and sellers share the burden of the tax.
• B) Buyers bear the entire burden of the tax.
• C) Sellers bear the entire burden of the tax.
• D) It depends on whether the buyers or the sellers are required to pay the tax.

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Definitions:

Earnings Per Share

A company's profit allocated to each outstanding share of common stock, indicating the company's profitability on a per-share basis.

Receivable Turnover Ratio

A measure of how efficiently a company collects its accounts receivable, calculated by dividing net credit sales by average accounts receivable.

Inventory Turnover Ratio

A metric that calculates the number of times inventory is sold or consumed in a given time frame, reiterating the effciency of inventory management.

Quick Ratio

Quick ratio, also known as acid-test ratio, is a liquidity metric that indicates a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.