The Burden of a Specific Sales Tax Falls Entirely on the Consumer

question 22

Multiple Choice

The burden of a specific sales tax falls entirely on the consumer when the

• A) elasticity of supply is zero.
• B) demand curve is perfectly elastic.
• C) price elasticity of demand is greater than the elasticity of supply.
• D) price elasticity of demand is zero.

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Definitions:

Operating Results

The financial outcomes from a company's core business operations, excluding the effects of financial and extraordinary items.

Activity Variances

Differences between planned or expected levels of activity and the actual outcomes, often analyzed in budgeting and performance measurement.

Spending Variances

The difference between the actual and budgeted amounts spent, often analyzed in budgeting and cost management to identify overspending or savings.

Meals

A term typically used to describe portions of food consumed or prepared for consumption at any given time.