Suppose the government imposes an 8 percent sales tax on clothing items and the tax is levied on sellers. Who pays for the tax in this situation? (Assume that the demand curve is downward sloping and that the supply curve is upward sloping.)
A) The sellers will pass on the entire sales tax to consumers and therefore the consumers bear the tax.
B) The tax will be borne partly by consumers and partly by sellers.
C) It is not possible to answer the question without information on price elasticities.
D) The tax is borne entirely by the sellers.
B
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According to the functional distribution of income, in the United States,
A) capital earns most of the income. B) the income earned by capital and labor are approximately equal. C) labor earns most of the income. D) land earns most of the income. E) entrepreneurs earn most of the income.
Are credit cards "money"?
A) No, because they are not used as a general medium of exchange. B) No, because they are used to make money. C) Yes, because they are used as a general medium of exchange. D) Yes, because they are used to make money.
The inefficiency of taxation means that imposing a tax on a good or service typically
A. increases costs across the board. B. reduces the amount produced. C. increases the amount produced. D. causes backlogs and surpluses.
Refer to Scenario 3.1 below to answer the question(s) that follow.SCENARIO 3.1-Streaming movies and movies shown in theaters are substitutes. -Streaming movies and OLED TVs are complements. -OLED TVs and movies shown in theaters are normal goods. -People watch streaming movies more often in the winter than in the summer.Refer to Scenario 3.1. In response to complaints from movie theater owners, the government removes an entertainment tax on movie tickets, but there are no additional taxes levied on streaming movies. This would lead to
A. a decrease in the price of movie tickets and the price of streaming movies. B. no change in the price of a movie ticket and a decrease in the price of streaming movies. C. a decrease in the price of movie tickets, but no change in the price of streaming movies. D. a decrease in the price of a movie ticket and an increase in the price of streaming movies.