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:

Taft-Hartley Act

A United States federal law that restricts the activities and power of labor unions.

Outlawed

Describes something that has been prohibited or made illegal by law or regulatory authority.

Norris-LaGuardia Act

A 1932 United States federal law that limited the power of federal courts to issue injunctions in nonviolent labor disputes, thereby protecting the right of workers to organize and strike.

Labor-Management Relations Act

A United States law that amends the National Labor Relations Act and is intended to limit certain practices by labor and management that can harm the general economy.