If a Tax Is Imposed on a Market with Elastic

question 225

Multiple Choice

If a tax is imposed on a market with elastic demand and inelastic supply:

• A) buyers will bear most of the burden of the tax.
• B) sellers will bear most of the burden of the tax.
• C) the burden of the tax will be shared equally between buyers and sellers.
• D) neither the buyer nor the seller will bear the burden of the tax..

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Definitions:

Reasonable Value

The fair or market value of a service or item, considered to be value as determined by what a willing buyer would pay to a willing seller in an arms-length transaction.

Workmanlike Manner

The expectation that services or work performed will meet the standards set by skilled individuals in that trade or industry.

Satisfaction

in legal terms means the fulfillment or discharge of an obligation, such as the repayment of a debt, resulting in the termination of the obligation.

Condition Precedent

A condition in a contract that must be met before a party's obligation becomes enforceable.