Figure 4-20 Refer to Figure 4-20

question 267

Multiple Choice

Figure 4-20 Refer to Figure 4-20. Suppose the same S and D curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the sellers of the good, rather than the buyers, are required to pay the tax to the government. Now, relative to the case depicted in the figure,

• A) the burden on buyers will be larger and the burden on sellers will be smaller.
• B) the burden on buyers will be smaller and the burden on sellers will be larger.
• C) the burden on buyers will be the same and the burden on sellers will be the same.
• D) The relative burdens in the two cases cannot be determined without further information.

---

Definitions:

Reacquired

Refers to assets or securities that have been repurchased or bought back by the company that originally issued them.

Noncumulative Preferred Stock

A type of preferred stock on which the right to receive dividends ends if the dividends are not declared in the year they are earned.

Undeclared Dividends

These are dividends that have been earned by shareholders but have not yet been officially announced by the company.

Cumulative

An adjective describing quantities or changes that are added together sequentially over time.