Economists Have Shown That the Burden of a Tax Is

question 8

Multiple Choice

Economists have shown that the burden of a tax is the same whether the tax is collected from the buyer or the seller.Why, then, are gasoline and cigarette taxes imposed on sellers?

• A)Sellers are more honest than buyers.
• B)The demand for both gasoline and cigarettes is very elastic.
• C)The Supreme Court has ruled that the government cannot impose taxes like these on buyers.
• D)It is more difficult for buyers to keep track of their purchases, and for the government to verify that the right amount of tax revenue is collected.

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Definitions:

Sales Collected

The actual revenue received from customers, including cash sales and collections on account receivables.

Raw Materials Inventory

The total cost or value of all the raw materials that are to be used in production and are currently stored in inventory.

Raw Materials Production Needs

The quantity and type of raw materials required to meet production targets based on the designed product and manufacturing processes.

Raw Materials Cost

The expense associated with acquiring the unprocessed materials required in the manufacture of products.