When a Tax Is Imposed on a Good for Which

question 50

Multiple Choice

When a tax is imposed on a good for which both demand and supply are very elastic,

• A)sellers effectively pay the majority of the tax.
• B)buyers effectively pay the majority of the tax.
• C)the tax burden is equally divided between buyers and sellers.
• D)None of the above is correct;further information would be required to determine how the burden of the tax is distributed between buyers and sellers.

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Definitions:

Workaround

A strategy or technique used to overcome a problem or limitation in a system or process without eliminating the problem entirely.

Desired Result

The specific outcome or goal that an individual or organization aims to achieve through their actions or initiatives.

Subordination

The process of placing in a lower rank or position, often in a hierarchical structure, implying a degree of authority or control by others.

Empowered

Given the authority, confidence, or capability to make important decisions or take action.