Use the Following to Answer Question(s): Tax Incidence

question 129

Multiple Choice

Use the following to answer question(s) : Tax Incidence

-(Exhibit: Tax Incidence) All other things unchanged, when a good or service is characterized by a relatively inelastic supply, as shown in Panel _______ , the greater share of the burden of an excise tax imposed on it (shown by the tax wedge in each panel) is borne by _______ .

• A) (a); buyers
• B) (b); sellers
• C) (a); sellers
• D) (b); buyers

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Definitions:

Capitalism

An economic system in which capital goods are owned by private individuals or businesses, and the production of goods and services is based on supply and demand in the market.

Skilled Crafts

Professions or trades that require specific training or skills, often involving manual work, such as carpentry, plumbing, or electrical work.

Unskilled Crafts

Jobs or occupations that do not require a specific set of skills or extended training to perform.

AFL

The American Federation of Labor, a national federation of labor unions in the United States, established to advocate for improved wages, working conditions, and rights of workers.