When a Tax Is Imposed on the Producers of a Product

question 21

Multiple Choice

When a tax is imposed on the producers of a product, which of the following is incorrect?

• A)The consumers and producers each bear some part of the burden.
• B)If the demand curve is relatively inelastic, the burden borne by consumers increases.
• C)If the supply curve is relatively elastic, the burden borne by consumers increases.
• D)If the tax is levied on producers, the producers bear the burden of the tax; if the tax is levied on consumers, the consumers bear the burden of the tax.

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Definitions:

Traffic Light

A signaling device positioned at road intersections, pedestrian crossings, and other locations to control flows of traffic, featuring red, yellow (amber), and green lights.

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An act of prejudice, discrimination, or antagonism directed against someone of a different race based on the belief in racial superiority or inferiority.

Filipino

Pertaining to the people, culture, or country of the Philippines, a Southeast Asian nation comprised of more than 7,000 islands.

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The belief in the superiority of one's own ethnic group, which can lead to viewing other cultures from the perspective of one's own.