Which of the following is true?
i.A tax on buyers has the same effect as the same sized tax on sellers.
ii.The more elastic the demand,the larger is the share of the tax paid by the buyers.
iii.The U.S.income tax is regressive.

Question

Quizplus · Accepted Answer

i. A tax on buyers shifts the demand curve downwards by the amount of the tax, and a tax on sellers shifts the supply curve upwards by the same amount. In both cases, the equilibrium price received by sellers decreases, and the price paid by buyers increases, leading to the same economic outcome. ii. The more elastic the demand, the easier it is for buyers to leave the market, so sellers bear a larger share of the tax. iii. The U.S. income tax is progressive, meaning that higher income individuals pay a higher percentage of their income in taxes.

Which of the Following Is True