Micro Unit 6, Question 12- Tax Incidence (Excise Tax)

What is the term used to describe the division of tax burden between consumers and producers?

• Tax allocation

• Tax burden

• Tax liability

• Tax incidence

When demand is relatively inelastic, who bears a larger portion of the tax burden?

• Producers

• Government

• Consumers

• Retailers

In the context of inelastic demand, what happens to the price consumers pay after a tax is imposed?

• It decreases

• It remains the same

• It increases

• It fluctuates

When demand is relatively elastic, which group is more affected by the tax?

• Producers

• Consumers

• Government

• Retailers

If demand is perfectly elastic, who would bear the entire tax burden?

• Producers

• Retailers

• Consumers

• Government