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- Subject
- Taxationeconomics-mcqs › taxation
- Published
- 28 May 2019
- Last updated
- 28 May 2026
Explanation
The tax burden falls more heavily on sellers when their supply is relatively inelastic compared to demand, meaning they cannot easily reduce quantity supplied in response to the tax. Therefore, producers end up paying a larger share of the tax.
More Taxation MCQs
Practice related questions from the same subject.
- 1.What defines a progressive tax system?
- 2.Which tax rate is most relevant when evaluating the vertical equity of a taxation system?
- 3.What defines an efficient tax system?
- 4.Sana values a pair of blue jeans at Rs400. When the price is Rs350, she purchases the jeans and gains a consumer surplus of Rs50. If a tax causes the price to increase to Rs450, Sana decides not to buy the jeans. What concept does this scenario illustrate?
- 5.What is the result when a tax changes the behavior of buyers and sellers, leading to a reduction in the quantity of goods produced and exchanged compared to a no-tax scenario?
- 6.What happens to the deadweight loss when the tax imposed on a product is doubled?
- 7.How does tax revenue change when a tax on a product begins at a low rate and is steadily increased?
- 8.Given that the supply of undeveloped land is fairly inelastic, what outcome would result from imposing a tax on such land?
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