Tax Incidence

question 106

Multiple Choice

Tax incidence:

• A) depends on the relative elasticity of the supply and demand curves in a market.
• B) depends on whether it is a buyers tax or sellers tax that is being imposed.
• C) depends on the amount of tax revenue generated once administrative burdens are taken into account.
• D) depends on whether the tax revenue is greater than the deadweight loss caused by the tax.

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Definitions:

Legal Existence

The state of being recognized by law as a legal entity capable of rights and obligations.

Closely Held

Describes a company or corporation that has a small group of shareholders, with shares that are not publicly traded on the stock market.

Publicly Traded

Refers to a company whose shares are bought and sold on the stock market, making its ownership and financial performance available to the public.

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, giving them partial ownership and possibly a right to vote on corporate matters.