The relative tax burden borne by buyers and sellers is called the:
A. tax wedge.
B. tax incidence.
C. tax revenue.
D. real tax.
123.Tax incidence is:
A. the difference between what the buyers pay and what the sellers receive in a market where taxes are present.
B. the relative tax burden borne by buyers and sellers.
C. the generated revenue that comes from taxes in markets.
D. the difference between the tax revenue generated and the value of deadweight loss caused by the imposition of the tax.
A. depends on the relative elasticity of the supply and demand curves in a market.
B. depends on whether it is a buyers tax or sellers tax that is being imposed.
C. depends on the amount of tax revenue generated once administrative burdens are taken into account.
D. depends on whether the tax revenue is greater than the deadweight loss caused by the tax.
125.If the demand curve is more elastic than the supply curve, then:
A. the buyers will bear a greater tax incidence than sellers.
B. the sellers will bear a greater tax incidence than buyers.
C. tax incidence will be shared equally by buyer and seller.
D. None of these is true.
126.If the demand curve is less elastic than the supply curve, then:
A. the buyers will bear a greater tax incidence.
B. the sellers will bear a greater tax incidence.
C. the buyers will bear a smaller tax burden than sellers.
D. the sellers will bear a greater tax burden than buyers.
127.If the supply curve is more inelastic than the demand curve, then:
A. the sellers will bear a greater tax incidence than the buyers.
B. the sellers will bear a smaller tax incidence than the buyers.
C. the sellers will bear an equal tax incidence as the buyers.
D. Any of these could be true.
128.If the producers bear a larger portion of tax incidence than the buyers, which of the following must be true?
A. They are not as business savvy as the buyers.
B. Their supply curve must be more inelastic than the buyers demand curve.
C. They face a very inelastic demand.
D. Their supply curve must be more elastic than the buyers demand curve.
129.If the producers bear a smaller tax incidence than the buyers in a market, which of the following must be true?
A. It must be a market for inferior goods.
B. It must be a market for luxury items.
C. Their supply curve must be more elastic than the buyers demand curve in this market.
D. Their supply curve must be less elastic than the buyers demand curve in this market.
130.Policymakers who wish to punish businesses that pollute by taxing them:
A. forget that the buyers of their product will likely share the burden of that tax.
B. forget that they have no control over who actually bears the tax incidence.
C. forget that the buyers of their product may actually bear the greatest burden of the tax.
D. All of these statements are true.
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