When a Tax Is Imposed on a Good for Which

question 50

Multiple Choice

When a tax is imposed on a good for which both demand and supply are very elastic,

• A)sellers effectively pay the majority of the tax.
• B)buyers effectively pay the majority of the tax.
• C)the tax burden is equally divided between buyers and sellers.
• D)None of the above is correct;further information would be required to determine how the burden of the tax is distributed between buyers and sellers.

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Definitions:

Body Weight

A measure of an individual's mass, usually considered in relation to height to assess health through indicators like BMI (Body Mass Index).

Reading Ability

The capacity to understand, interpret, and derive meaning from written words.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together, without implying causation.

Causation

The relationship between cause and effect, where an action or event directly leads to another action or event.