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- Subject
- Prices, Wages & Taxeseconomics-mcqs › prices-wages-taxes
- Published
- 30 May 2019
- Last updated
- 28 May 2026
When does the tax burden primarily fall on consumers in a market?
Multiple choice question for Prices, Wages & Taxes. Select an option, then review the explanation below.
Explanation
The tax burden tends to fall more on buyers when the demand curve is inelastic (buyers are less sensitive to price changes) and the supply curve is elastic (producers can adjust quantity easily). In this case, consumers bear a larger share of the tax because they do not reduce their quantity demanded significantly despite higher prices.
More Prices, Wages & Taxes MCQs
Practice related questions from the same subject.
- 1.Which statement accurately describes how the tax burden is allocated?
- 2.When a tax is imposed on an essential product, who is most likely to bear the majority of the tax burden?
- 3.If a tax is imposed on buyers in a market, what is the effect on the distribution of the tax burden?
- 4.In the supply and demand framework, when a tax is imposed on sellers of a product, which curve shifts and in what direction?
- 5.Which type of employee is most likely to face greater challenges in securing employment following an increase in the minimum wage?