There Is a Difference Between Who Is Legally Required to Send

question 74

Multiple Choice

There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?

• A) whether the tax is imposed by the federal government or a state government
• B) whether the tax is based on the ability-to-pay principle or the benefits-received principle
• C) the motive for the tax: If the tax is designed to raise revenue, more of the burden will fall on firms. If the tax is designed to achieve a social objective (for example, to discourage smoking) more of the burden will fall on consumers.
• D) the elasticity of demand for the item that is taxed

---

Definitions:

Undisclosed Principal

A person whose existence is unknown to the third party in a contract made by an agent on their behalf.

Apparent Authority

The power that a third party perceives an agent has over the principal, based on the principal's behavior.

Actual Authority

Actual authority refers to the express and implied powers that an agent has been intentionally granted by the principal in an agency relationship.

Subagent

A person authorized by an agent to perform tasks or duties on behalf of the agent's principal.