When a Tax Is Imposed on Tea and Buyers of Tea

question 96

Multiple Choice

When a tax is imposed on tea and buyers of tea are required to send in the tax payments to the government,

• A)buyers of tea and sellers of tea both are made worse off.
• B)buyers of tea are made worse off and the well-being of sellers is unaffected.
• C)buyers of tea are made worse off and sellers of tea are made better-off.
• D)the well-being of both buyers of tea and sellers of tea is unaffected.

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Definitions:

Treasury Stock

Shares that were once outstanding but were bought back by the company and are held in its treasury.

Repurchase Price

Repurchase price is the amount of money a company agrees to pay to buy back its own shares or bonds from investors, often determined at the time of the repurchase agreement.

Total Assets

The sum of all assets, both current and non-current, that a company owns.

Treasury Stock

Shares that were once part of the outstanding shares and have been bought back by the issuing company, reducing the amount of outstanding stock on the open market.