If a $10 Sales Tax Is Imposed on a Good

question 159

Multiple Choice

If a $10 sales tax is imposed on a good and the equilibrium price increases by $10,the tax is

• A) split between buyers and sellers but not evenly.
• B) paid fully by sellers.
• C) paid fully by buyers.
• D) split evenly between buyers and sellers.
• E) perhaps split between buyers and sellers but it is impossible to determine the incidence without further information.

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Definitions:

Partnership Debt

Financial obligations for which all partners in a partnership are jointly and severally liable.

New Ovens

Recently manufactured or acquired cooking appliances designed for baking, heating, or drying food.

Capital Contribution

It is the amount of money or assets that an investor puts into a company in exchange for part ownership or a stake in the company.

Manages Business

The process of organizing, planning, directing, and controlling the resources and operations of a business to achieve its goals and objectives.