An Excise Tax Levied on a Product Will Impose a Smaller

question 91

Multiple Choice

An excise tax levied on a product will impose a smaller relative burden on consumers (and a larger relative burden on sellers) when the:

• A) supply of the product is relatively less elastic than demand.
• B) supply of the product is relatively more elastic than demand.
• C) tax is collected from the buyers.
• D) tax is collected from the sellers.

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Definitions:

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