Economists Have Shown That the Burden of a Tax Is

question 10

Multiple Choice

Economists have shown that the burden of a tax is the same whether the tax is collected from the buyer or the seller.Why, then, are gasoline and cigarette taxes imposed on sellers?

• A)Sellers are more honest than buyers.
• B)The demand for both gasoline and cigarettes is very elastic.
• C)The Equal Protection Clause of the U.S. Constitution prohibits the government from imposing taxes like these on buyers.
• D)It is more difficult for buyers to keep track of their purchases, and for the government to verify that the right of amount of tax revenue is collected.

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Definitions:

Partnership Capital

The total amount of resources contributed by partners to a partnership for the purpose of starting or expanding the business.

Partner's Contribution

Refers to the resources (capital, property, expertise) a partner brings into a partnership.

Corporation

A legal entity recognized by law as a separate entity from its owners with its own rights, liabilities, and obligations.

Board of Directors

A group of individuals elected to represent shareholders and govern the corporation's affairs and decision-making processes.