Suppose the government imposes an 8 percent sales tax on clothing ...

[elizabeth18]

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.

Question 2

Compensating differentials are
 
  A) non-monetary benefits from being employed, such as health-care benefits.
  B) higher wages that compensate the more experienced workers in a field.
  C) wages paid to workers where the supply of labor is great relative to demand.
  D) higher wages that compensate workers for unpleasant aspects of a job.

[Ahnyah]

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[elizabeth18]

Correct answers!

[Ahnyah]

Great! Please up vote