Micro Economics MCQ (GK Set-1) with Answers

141) The burden of a tax falls more heavily on the sellers in a market when

Answer is:

demand is elastic and supply is inelastic

142) A tax placed on a good that is a necessity for consumers will likely generate a tax burden that

Answer is:

falls more heavily on buyers

143) The burden of a tax falls more heavily on the buyers in a market when

Answer is:

demand is inelastic and supply is elastic

144) Which of the following statements about the burden of a tax is correct?

The tax burden generated from a tax placed on a good consumers perceive to be a necessity will fall most heavily on the sellers of the good

The burden of a tax falls on the side of the market (buyers or sellers) from which it is collected

The distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation.

The tax burden falls most heavily on the side of the market (buyers or sellers) that is most willing to leave the market when price movements are unfavourable to them.

Answer is:

The distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation.

145) For which of the following products would the burden of a tax likely fall more heavily on the sellers?

Answer is:

141) The burden of a tax falls more heavily on the sellers in a market when

demand is elastic and supply is inelastic

142) A tax placed on a good that is a necessity for consumers will likely generate a tax burden that

falls more heavily on buyers

143) The burden of a tax falls more heavily on the buyers in a market when

demand is inelastic and supply is elastic

144) Which of the following statements about the burden of a tax is correct?

The distribution of the burden of a tax is determined by the relative elasticities of supply and demand and is not determined by legislation.

145) For which of the following products would the burden of a tax likely fall more heavily on the sellers?

entertainment