If the Demand for Coffee and the Supply of Coffee

question 135

Multiple Choice

If the demand for coffee and the supply of coffee are both elastic then:

• A)coffee buyers will bear most of the burden of the tax
• B)coffee sellers will bear most of the burden of the tax
• C)the burden of the tax will be shared equally between buyers and sellers
• D)it is impossible to determine how the burden of the tax will be shared

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Definitions:

Probable Future Sacrifices

The expected relinquishment of assets as a result of obligations.

Liabilities

Economic obligations or debts owed by a business to others, typically arising in the course of its operations.

Economic Benefits

Benefits that can be quantified in monetary terms and usually include profits, revenues, and savings.