Question

1. The incidence of a specific (unit) tax on necessity products falls largely on the buyers.

   True

   False

2. The demand curve represents the costs of the sellers.

   True

   False

3. The average tax rate is the

   	A.	percentage of income paid in tax
   	B.	average of the rates at which income and taxes increase.
   	C.	percentage of an additional dollar of income paid in tax
   	D.	total amount of taxes paid by an individual.
   	E.	same as the marginal tax rate for a progressive tax.

Answer 1

a) True, as the necessity goods are more inelastic demand that shifts the ta burden on the consumers.

b) False, the supply curve represents the cost to the seller.

c) "A"

Average income tax is the percentage of income paid in taxes.