Question :
22) The term tax incidence refers to
A) the degree of : 1388030
22) The term tax incidence refers to
A) the degree of progression of a tax.
B) the actual division of the burden of a tax between buyers and sellers in a market.
C) the amount of revenue government collects from a tax imposed on a good or service.
D) whether the burden of a tax rests more heavily on those with higher incomes or those with lower incomes.
23) When the demand for a product is more elastic than the supply,
A) consumers pay the majority of the tax on the product.
B) consumers pay the entire tax on the product.
C) firms pay the majority of the tax on the product.
D) firms pay the entire tax on the product.
24) When the demand for a product is less elastic than the supply,
A) consumers pay the majority of the tax on the product.
B) firms pay the majority of the tax on the product.
C) firms pay the entire tax on the product.
D) consumers pay the entire tax on the product.
25) There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?
A) whether the tax is imposed by the federal government or a state government
B) whether the tax is based on the ability-to-pay principle or the benefits-received principle
C) the motive for the tax: If the tax is designed to raise revenue, more of the burden will fall on firms. If the tax is designed to achieve a social objective (for example, to discourage smoking) more of the burden will fall on consumers.
D) the elasticity of demand for the item that is taxed
26) How would the elimination of a sales tax affect the market for a product that had been subject to the tax?
A) The demand for the product would rise and the equilibrium price would fall by the amount of the tax.
B) The equilibrium price for the product would fall by less than the amount of the tax.
C) The reduction in government revenue from the tax would be made up by an increase in property taxes.
D) The supply of the product would become more elastic.
27) Which of the following statements concerning the federal corporate income tax is true?
A) It is an efficient tax because it imposes a small excess burden relative to the tax revenue it raises.
B) The incidence of the corporate income tax can be determined by using demand and supply analysis.
C) Determining the incidence of the corporate income tax is complicated because it is not certain how corporations respond to the tax.
D) The corporate income tax is an example of the benefits-received principle.
28) Most economists agree that some of the burden of the corporate income tax
A) is reduced because the tax is progressive.
B) is shared by the federal government.
C) is reduced because the tax is used to attain a social objective.
D) is passed on to consumers in the form of higher prices.
29) A study by the Congressional Budget Office (CBO) regarding the corporate income tax included the following statement: “A corporation may write its check to the Internal Revenue Service for payment of the corporate income tax, but the money must come from somewhere…” The comments that followed this statement argued that
A) corporations pass on some of the burden of the tax to investors in the company, to workers, and to consumers.
B) the corporate income tax is a reliable source of revenue because corporations cannot avoid paying the tax.
C) it is necessary to retain the tax because it is based on the ability-to-pay principle.
D) the tax is more progressive than the individual income tax.
30) “For a given supply curve, the excess burden of a tax will be greater when the demand for a product is less elastic than when the demand is more elastic.” This statement is
A) correct.
B) incorrect because the incidence of the tax, not the burden of the tax, is affected by the elasticity of demand.
C) incorrect. When demand is less elastic, the burden of the tax is smaller than when the demand is more elastic.
D) incorrect. The statement confuses demand with quantity demanded.
31) For a given supply curve, how does the elasticity of demand affect the burden of a tax imposed on a product?
A) The excess burden of the tax will be minimized when the demand is unit-elastic.
B) The excess burden of the tax will be greater when the elasticity of supply is greater than the elasticity of demand.
C) The excess burden of the tax will be greater when the demand is less elastic than when it is more elastic.
D) The excess burden of the tax will be greater when the demand is more elastic than when it is less elastic.
