Which of the Following Is True Regarding Use Taxes

question 102

Multiple Choice

Which of the following is true regarding use taxes?

• A) A use tax is relatively easy to enforce compared to a sales tax.
• B) Use taxes attempt to eliminate any tax advantage of purchasing goods out of state.
• C) Use taxes encourage taxpayers to buy goods out of state to avoid paying sales tax in their home state.
• D) A use tax is generally a progressive tax.
• E) None of these is true.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded at various prices.

Quantity Demanded

The specific amount of a good or service consumers are willing to buy at a given price point, holding all else constant.

Quantity Supplied

The total amount of a good that producers are willing to sell at a given price over a specific time period.

Shortage

A situation in which demand for a good or service exceeds the available supply at a specific price.