When a Tax Is Imposed on a Good for Which

question 50

Multiple Choice

When a tax is imposed on a good for which both demand and supply are very elastic,

• A)sellers effectively pay the majority of the tax.
• B)buyers effectively pay the majority of the tax.
• C)the tax burden is equally divided between buyers and sellers.
• D)None of the above is correct;further information would be required to determine how the burden of the tax is distributed between buyers and sellers.

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Definitions:

Adversarialism

A philosophy or approach characterized by conflict and opposition, often seen in competitive situations or disputes.

NLRA

The National Labor Relations Act, a foundational U.S. law enacted in 1935 to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices.

Competitive Markets

Markets characterized by numerous buyers and sellers such that no single participant has the market power to influence the prices of products or services.

Supply of Labor

The total number of potential workers available to perform work in an economy, determined by factors like demographics, labor market conditions, and immigration policies.