Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 6 - Part II - Supply, Demand, and Government Policies - Questions for Review - Page 129: 5

Answer

Taking off a tax paid by buyers and replacing it with a tax paid by sellers will not affect price buyers pay, price sellers receive, or quantity sold because tax is a shared burden. The costs will be reflected in the market.

Work Step by Step

This question asks you to identify how taxes work in marketplaces. Visualize with graph and think conceptually how things work in the world. If sellers pay higher taxes they will sell products at a higher rate.
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