When a Good with a Perfectly Inelastic Demand Is Taxed,the

question 148

Multiple Choice

When a good with a perfectly inelastic demand is taxed,the incidence of the tax is borne

• A) entirely by producers.
• B) by consumers and producers equally.
• C) entirely by consumers.
• D) mostly by consumers.
• E) mostly by producers.

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Definitions:

Public Choice Theory

A framework that applies economic principles to the analysis of political behavior, emphasizing the self-interest of voters, politicians, and bureaucrats.

Excise Tax

A tax imposed on specific goods, services, or activities, often included in the price of products like tobacco, alcohol, and gasoline.

Small Business

An independently owned and operated company that is limited in size and revenue depending on the industry.

Camping Facilities

Venues, including campgrounds and parks, that provide outdoor accommodations and amenities for campers.